“This inflation surge highlights the brutal hit to household and business finances from April’s multitude of eyewatering bill rises and tax hikes, with higher energy costs in particular driving an uncomfortably large increase in the headline rate.
“Rising services and core inflation suggest that the double blow for businesses from the rising National Insurance and National Living Wage has further fuelled underlying price pressures, more than offsetting the downward squeeze from a wilting labour market.
“While the aftershocks from ‘awful April’ should keep inflation above 3% for a while, it could start drifting downwards as lower energy bills kick in, assisted by July’s expected fall in Ofgem’s energy price cap.
“These figures probably rule out a June rate cut and while policymakers should view April’s spike as a temporary blip, the size of the increase means an August policy loosening is far from a done deal.”
ENDS
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