UK Inflation Hits 15-Month High As Utility Bills Soar

Britain’s annual inflation rate rose more than expected in April, driven by sharp increases in energy and water bills, official data revealed on Wednesday, May 21.

The Consumer Prices Index climbed to 3.5 percent last month, up from 2.6 percent in March, according to the Office for National Statistics.

Economists had predicted a rise to 3.3 percent. At 3.5 percent, the inflation rate reached its highest level since early 2024, the ONS added.

“I am disappointed with these figures because I know cost of living pressures are still weighing down on working people,” Finance Minister Rachel Reeves said in a statement.

UK regulators permitted private companies to raise household bills starting in April, factoring in changes in oil and gas markets as well as the financial challenges faced by water providers.

“Significant increases in household bills caused inflation to climb steeply,” ONS acting director general, Grant Fitzner, said in a statement.

“Gas and electricity bills rose… compared with sharp falls at the same time last year.”

He noted that “water and sewerage bills also rose strongly… as did vehicle excise duty, which all pushed the headline rate up to its highest level since the beginning of last year”.

Energy bills are expected to decrease starting in July, following significant recent drops in oil prices after US President Donald Trump’s tariff measures, analysts say.

In April, businesses also faced a tax increase and a rise in the minimum wage, both introduced by the Labour government after its July election win that ended 14 years of Conservative rule.

Tory economy spokesman Mel Stride blamed the inflation surge on “Labour’s economic mismanagement.”

“Families are paying the price for the Labour… choices,” he added, as businesses pass on higher costs to consumers.”

Analysts said the latest data might lead the Bank of England to slow down the pace of its recent interest rate cuts.