UK inflation rate more than doubles in April

The annual UK inflation rate more than doubled in April, as higher energy and clothing costs drove prices higher.

The jump to 1.5% in April from 0.7% in March, means consumer prices are now at their highest level since March 2020 at the outset of the pandemic.

The difference was mainly due to price rises this year compared with falls at the beginning of the pandemic, the Office for National Statistics said.

A rise in the price of oil had also led to higher petrol prices, it added.

Petrol prices were now at their highest level since January 2020, the ONS said.

Hannah Audino, economist at PwC said the sharp rise largely reflected an increase in prices from their low levels a year ago at the start of the pandemic.

She said she expected inflation to continue to rise as lockdown restrictions eased and the economy continued to reopen “allowing consumers to unleash some of their excess savings”.

“Recent survey evidence suggests that the share of households who plan to spend some of their savings has increased in recent months, as the vaccine rollout boosts confidence,” she added.

Two weeks ago the Bank of England said that UK inflation is heading above its 2% target and it expected it to hit 2.5% at the end of 2021.

That is due to a rise in global oil prices and the expiry in September of Covid emergency cuts to value added tax (VAT) in the hospitality sector, as well as comparisons with the pandemic slump of 2020.

The Bank thinks inflation will then slip back to 2% in 2022 and 2023.

Bank of England governor Andrew Bailey said on Tuesday that so far there was no strong evidence that higher prices paid by manufacturers were feeding through to consumer prices.

However, he said the Bank “will be watching this extremely carefully” and would take action if necessary. (BBC)
•PHOTO: Clothes on display in Britain. Prices rose again in April