UK inflation soared to 9% in April, its highest level for more than 40 years, driven by a record rise in household energy bills and soaring transport costs. The Office for National Statistics said the 54% increase in the energy price cap in April, which pushed the average annual gas and electricity bill close to £2,000, was the main factor behind the jump from 7% in March.
The escalating cost of food and transport also contributed to the rising cost of living, deepening the crisis for millions of low- and middle-income families. Average petrol prices rose to a record 161.8p a litre in April from 125.5p a year earlier, while diesel hit 176.1p a litre, leading to a 31.4% annual increase in motor fuel costs.
The end of a temporary VAT cut for the hospitality industry pushed up prices, as restaurants and hotels passed on the increase from 12.5% to 20%. A steep fall in the value of the pound, from over $1.30 to $1.24, added further pressure on businesses by raising import costs.
Figures from the Resolution Foundation showed the poorest tenth of households faced an inflation rate of 10.2% in April, significantly higher than the 8.7% for the top 10% of earners. The Institute for Fiscal Studies suggested the rate for the poorest could be closer to 11%.
Business groups said all sectors were suffering from the steep rise in energy and fuel costs, with many facing a shock similar to the pandemic but without the same government support. The British Chambers of Commerce called for an emergency mini-budget, warning that the UK could be in recession by the third quarter.
Labour criticised the government for refusing to tax fossil fuel companies to fund extra support for poorer households, while Conservative MPs voted against a windfall tax on North Sea oil and gas firms. Chancellor Rishi Sunak has indicated he may offer further measures, but the cabinet is reportedly split over funding.
