Inflation rate in UK hits 40-year high as energy bills soar

The UK’s Consumer Prices Index (CPI) rose by 9 per cent in the 12 months to April 2022, the highest level since 1982 as well as at its fastest rate on record last month, the British Office for National Statistics (ONS) said.

The Consumer Prices Index inflation increased to 9 per cent in April from 7 per cent in March – the fastest measured rate rise since official records began in 1989. The jump in inflation was mainly driven by energy bills, which increased by 54 per cent for the average UK household at the start of April.

Earlier this year, the Bank of England said that inflation will soar above 10 per cent in 2022, and earlier this month raised interest rates from 0.75 per cent to 1 per cent, a 13-year high.

The soaring energy bill follows Britain's Office of Gas and Electricity Markets (Ofgem) cap increased on April 1, which it said was driven by a record rise in global gas prices with wholesale prices quadrupling in the last year".

The ONS said the rise resulted in 12-month inflation rates of 53.5 per cent for electricity and 95.5 per cent for gas, compared with rates of 19.2 per cent and 28.3 per cent, respectively, in March.

“Inflation rose steeply in April, driven by the sharp climb in electricity and gas prices as the higher price cap came into effect,” Grant Fitzner, ONS Chief Economist, told British media on Wednesday.

Around three-quarters of the increase in the annual rate in April came from utility bills, he said.

According to ONS’ new modelled historical estimates, CPI annual inflation was higher than the current level 40 years ago.

In comments last month, British Chancellor Rishi Sunak said “we cannot protect people completely” from global problems which contributed to inflation hitting 9 per cent in April, but we “are providing significant support where we can, and stand ready to take further action”.