Report Summary

April 2025

3 minute read

Note: This report summary is one or two months behind the current month as standard reporting practice. The content is indicative only and incomplete with certain data undisclosed. Subscribe to access this data or take out a free 30 day subscription trial now.

Inflation

Headline inflation surges: CPI inflation rose sharply to xx% in April, up from xx% in March, the sharpest rise since January 2024.

The jump was driven by higher household energy bills, water charges, and surging airfares during the Easter holidays. The rise was at the higher end of forecasts and pushed the UK to the top of the G7 inflation table.

Core inflation rises: Core CPI, excluding energy, food, alcohol, and tobacco, rose to xx% in April from xx% in March. Much of the increase came from services categories affected by timing distortions and tax changes, with underlying price pressures still high in areas like rents and hospitality.

Goods and services inflation: Goods inflation climbed to xx%, up from xx%, driven by renewed food price pressures and stronger demand for recreation goods.

Services inflation jumped to xx% from xx%, though much of the rise can be attributed to one-off factors such as Vehicle Excise Duty changes and the Easter calendar effect on airfares and holiday pricing.

Housing-related inflation spikes: Housing and household services inflation surged to xx%, from xx% in March, the highest since June 2023.

The increase was largely due to Ofgem’s higher energy price cap and the largest rise in water bills since at least 1988.

Transport inflation picks up: Annual transport inflation increased to xx% from xx%, pushed up by a xx% monthly rise in airfares and a doubling of road tax on new petrol and diesel cars. Airfare prices were impacted by the timing of data collection which coincided with late timing of Easter this year compared to a year ago. This was partially offset by falling fuel prices.

Recreation and culture sees inflation rebound: Inflation in this category rose to xx%, up from xx%, driven by Easter-related travel and holiday pricing. Computer games and data processing equipment saw smaller increases, while software prices edged higher.

Food inflation edges higher: Food and non-alcoholic beverage inflation rose to xx%, up from xx%, the highest level for a year. Meat, bread, cereals, and soft drinks drove the rise, while vegetable prices and dairy costs fell. Monthly price growth nearly doubled compared to April 2024.

Clothing prices weaken: Clothing and footwear prices fell by xx% annually, compared with a rise of xx% in March. Heavy discounting in women’s and children’s wear, possibly linked to the Easter calendar shift, led to a xx% monthly drop.  

Inflation outlook: April’s stronger-than-expected inflation rate has shifted the interest rate outlook, with markets firmly pricing out a June rate cut, with the probability falling to just xx%.

The headline jump to xx%, matching the Bank of England’s forecast peak for late summer, has raised concerns about whether price pressures are easing fast enough. While much of the increase was driven by temporary factors, they have complicated the picture for policymakers in the short term.

Markets now expect only one more cut this year, and not before September, with the odds currently sitting below xx%. Persistent wage growth and higher employer costs from National Insurance changes continue to drive sticky inflation in labour-intensive sectors.

The Bank still intends to loosen policy, but the pace is under review. A slower, more flexible approach now seems more likely than a predictable quarterly path.

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CPI inflation rose sharply to 3.5% in April, up from 2.6% in March, the sharpest rise since January 2024.