The Consumer Price Index (CPI) inflation rate was 9.3% last month, the highest in four decades.
CPI Inflation rose by 2 percentage points between March and April this year – the sharpest monthly increase since 1980.
The Bank of England stated previously that inflation could reach 10% by 2022.
This recent surge was driven by rising household energy bills, with the energy price cap increasing by £693 (54 per cent) for the typical family in April. The impact of higher fuel prices on households has already been felt. However, some of the effects of rising energy prices will still be felt by consumers.
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Food prices rose by 6.7% (the highest level since 2011) and durable goods rose 8.5% (the second highest recorded rate).
Analysis of the latest data by the Resolution Foundation think tank shows that inflation is – at 10.2 per cent – significantly higher for the poorest tenth of households than it is for the richest tenth of households (8.7 per cent). This is because households with lower incomes spend more on energy bills, where prices are rising rapidly.
Jack Leslie, senior economist at the Resolution Foundation, said: “Nobody knows how long these pressures will last, or how workers will respond via higher wage demands, which is why the Bank faces a tough judgement on the pace and scale of interest rate rises.
“But one thing is certain – the government must provide further targeted support for those lower income families at the sharp end of this crisis.”
Kitty Ussher, chief economist at the Institute of Directors, said: “While this high rate was to be expected given the rise in the retail energy price cap, it is nevertheless shockingly high.
“Business leaders tell us that the UK macroeconomy is now their number one negative issue, driven by worries over inflation. Companies are reluctant to invest, which is creating problems for the economy in the future.
“If the Chancellor intends to intervene in advance of the further price cap rise in the autumn, he should make that clear, to start bringing expectations of future inflation back down.”
Liberal Democrat Leader Ed Davey has called for an emergency VAT cut to help struggling consumers, saying: “Families and pensioners on the brink need saving from soaring inflation but this Conservative government is nowhere to be found.
“We need an emergency VAT cut now to slash prices at the till and fuel pump today. The warning lights are all flashing red and Boris Johnson hasn’t a second to lose.”
