April saw inflation rise to 3.5%, exceeding expectations due to sharp increases in water bills, energy costs, and council tax. This surge follows a dip to 2.6% in March. Analyst forecasts underestimated this rise, prompting questions on the Bank of England's interest rate strategies. Despite higher inflation, some analysts predict falling energy prices could mitigate future inflation increases. A spokesperson for the Office for National Statistics highlighted household expenses as a driving force behind inflation, marking a significant month for economic indicators.
The rise in inflation to 3.5% was driven by significant increases in household bills, particularly in energy costs, water, and council tax.
Despite an increase in inflation, the Bank of England may resist calls for deeper interest rate cuts as prices climbed more than anticipated.
A spokesperson for the ONS emphasized household bills as a key factor in inflation spikes, noting the influence of changing energy price caps on costs.
Recent forecasts indicate a potential downtrend in energy prices which might limit future inflation increases, but the current forecast predicts a steady average of 3.5%.
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