2025 CPI 3.5%: UK Inflation Hits a New Peak
According to the Office for National Statistics (ONS), the Consumer Prices Index (CPI) jumped to 3.5 % in April – the highest rise since October 2022. The spike is largely down to an energy price cap hike, climbing council tax, water bills, and a few other cost drivers that have left households feeling the squeeze.
What’s Driving the Numbers?
- Energy price cap – Ofgem lifted the cap by 6.4 % in April, causing a sharp uptick in gas and electricity bills.
- Water and sewerage rates – Bills for these services saw a noticeable rise, adding to the pressure.
- Vehicle excise duty – The tax on cars increased, pulling the headline inflation figure higher.
Political Reactions
Austen’s Chancellor, Rachel Reeves, admitted she was “disappointed” with the figures. She’s pledged to move “further and faster” with economic plans to get more money back into people’s pockets.
Shadow chancellor Sir Mel Stride slammed the rise as a result of the Labour budget’s “damaging” tax hikes, stating, “Families are paying the price for the Labour Chancellor’s choices.”
Expert Insight
- Grant Fitzner, ONS acting director‑general, attributes the surge to the energy price cap and increased costs for water and vehicle duties.
- Rob Wood of Pantheon Macroeconomics predicts that 3.5 % inflation might stick for the rest of 2025, with the Monetary Policy Committee likely to slow down the pace of rate cuts.
- Personal Finance Analyst Alice Haine notes that higher inflation erodes household savings and eating power, warning of a return to the cost‑of‑living crisis era.
Bottom Line for Your Wallet
The latest CPI reading means more spending on essentials – from the light bulb to the GP appointment. Might’t be the most comforting news, but knowing what’s driving the numbers can help you plan for the weeks ahead.
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