Inflation has hit new records as the cost-of-living crisis surges in the UK, newly released figures have shown.
New data released today from the Office for National Statistics show that inflation hit 9% in the year to April, as measured by the consumer prices index (CPI), as energy bills soared during the month.
April’s inflation is an increase from 7% in March, and the highest one-year increase in consumer prices since the CPI records began in 1989.
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The rise last month was driven by an unprecedented surge in energy bills. Regulator Ofgem decides the maximum that an energy supplier can charge its customers, but the amount is changed every six months.
In April, the change was the highest on record – 54% for an average household – adding several hundred pounds to bills every year.
It has had a clear impact on people’s finances. A survey by McKinsey, a consultancy firm, found that 61% of households are more conscious about the amount of energy they use at home.
The survey found that rising prices were the biggest concern that respondents had in the UK, followed by the invasion of Ukraine and then Covid.
Grant Fitzner, chief economist at the Office for National Statistics (ONS), said: “Inflation rose steeply in April, driven by the sharp climb in electricity and gas prices as the higher price cap came into effect.
“Around three-quarters of the increase in the annual rate this month came from utility bills. We have also published new modelled historical estimates today which show that CPI annual inflation was last higher 40 years ago.
“Steep annual rises in the cost of metals, chemicals and crude oil also continued, along with higher prices for goods leaving factory gates. This was driven by increases for food products, transport equipment and metals, machinery and equipment.”
Matthew Ryan, an analyst at financial services firm Ebury, said that the inflation data might force the hand of the Bank’s Monetary Policy Committee, which sets interest rates.
“If confirmed, this would place huge pressure on the Bank of England to continue raising interest rates at upcoming meetings,” he said.
“Communications from the MPC have turned increasingly dovish and largely muddled in recent weeks, although we think that upcoming inflation prints will likely force the bank’s hand.”
On Monday, the Bank governor, Andrew Bailey, said that, ultimately, high global energy and goods prices would hit demand in the UK and therefore increase unemployment.
“The main driver of inflation and what brings it down is the very big, real income shock which is coming from outside forces and, particularly, energy prices and global goods prices,” Mr Bailey said.
