UK inflation hits highest for 40 years as energy bills soar

UK inflation, the rate at which prices are rising, jumped to 9% in the 12 months to April, up from 7% in March.

The surge came as millions of people saw an unprecedented £700-a-year rise in energy costs last month.

Higher fuel and food prices, driven by the Ukraine war, are also pushing the cost of living up, with inflation expected to continue to rise this year.

Around three quarters of the rise in inflation in April came from higher electricity and gas bills, according to the Office for National Statistics (ONS).

A higher energy price cap – which is the maximum price per unit that suppliers can charge customers – kicked in last month, meaning homes using a typical amount of gas and electricity are now paying £1,971 per year on average.

The ONS, which publishes the UK’s inflation rate, said the price of food, transport and machinery also drove prices higher.

“All items” on the menus of restaurants and cafes had increased, the UK statistics body said, which it said was due to the VAT rate for hospitality returning to 20% in April, after being cut to 12.5% to aid businesses recovering for the coronavirus pandemic.

Inflation is the rate at which prices are rising. For example, if a bottle of milk costs £1 and that rises by 5p, then milk inflation is 5%.

With surging prices putting households under increasing pressure, calls for the government to do more to help those struggling are growing.

This is official, national confirmation of what everyone can see in their own personal finances. Price rises are accelerating, and energy bills are a huge factor in that trend.

Bank of England forecasts suggest we are not yet at the peak. Energy bills will rise again in October. In turn, inflation will hit higher levels by the end of the year.

Citizens Advice says “the warning lights could not be flashing brighter” than they are now. But many will argue those lights will be blinding when we get to the colder, darker nights of winter.

For now, debt charities say anyone in difficulty paying their bills should seek help early, rather than face a more acute and complex financial problem later in the year.

In response to the latest inflation figure, chancellor Rishi Sunak said the government “cannot protect people completely” from rising inflation, which he said was a global problem.

He said he was “providing significant support where we can, and stand ready to take further action”.

Source: BBC