UK inflation unexpectedly fell to 2.8% in April, offering apparent relief as energy price cap reductions temporarily offset rising costs from the Middle East conflict.
However, experts have cautioned that the improvement may be short-lived, with higher wholesale energy costs yet to fully impact household bills when the price cap resets in July. Financial analysts warn the Bank of England should not interpret April’s figure as evidence that inflation pressures are under control.
Meanwhile, separate housing data shows UK house price annual inflation slowed to 1.2% as the effects of last year’s stamp duty rush fade, while private rent inflation has risen slightly.
Commenting on the inflation figures, Kevin Brown, savings expert at Scottish Friendly, said:
“At first glance, April’s surprising inflation reading of 2.8 per cent looks like welcome progress. Yet it should not be taken as a sign that the UK has somehow weathered with resilience the inflationary fallout from the conflict in the Middle East.
“A large reason why inflation eased in April is that the energy price cap was reset lower before the recent surge in oil and gas prices fully fed through to households. When the cap is updated again in July, it is likely to reflect more of the increase in wholesale energy costs that motorists have already experienced at the petrol pumps.
“Today’s figure is unlikely to provide comfort to the Bank of England that inflation pressures are back under control. Another inflation reading is still to come before policymakers next meet in June, which should provide a clearer picture of underlying price pressures ahead of the Bank’s next rate decision.
“If living costs continue to rise over the summer – especially as wage growth slows – many households could find themselves under renewed financial pressure. For those able to take a longer-term view, investing can play an important role in helping preserve and grow wealth over time.”
Commenting on today’s house price data for March and rents data for April, ONS Head of Housing Market Indices Aimee North said:
“Average UK house price annual inflation slowed in March because prices fell this March but rose sharply this time last year. Last year’s large monthly rise was due to unusually strong activity ahead of the April 2025 stamp duty changes in much of the country.
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“The house price annual rate decreased for all English regions except London, where the annual rate increased slightly. However, London remains the region with the lowest annual inflation, with inner London boroughs continuing to see the biggest annual falls.
“UK private rent annual inflation rose this month, driven by rises in the annual rate for some English regions, including London, and Wales.”
