April bill shock pushes inflation to highest level since January 2024

The pace of inflation surged last month to an annual rate of 3.5%, its highest level in more than a year, according to official figures which pointed to hikes to essential household bills.

The Office for National Statistics (ONS) said the increase, up from a 2.6% rate in March, was explained by an unusual increase to energy bills during April and steeper rises for other staples such as water. Households on the energy price cap saw a rare spring rise of 6.4% in April, while council tax bills were widely up by the 5% level.

Money latest: Reaction to inflation spike The water regulator allowed suppliers to charge customers an extra £10 per month, on average, across England and Wales while broadband, mobile and TV licence costs also rose. ONS acting director general Grant Fitzner said of the price picture: "Significant increases in household bills caused inflation to climb steeply.

"Gas and electricity bills rose this month compared with sharp falls at the same time last year due to changes to the Ofgem energy price cap. "Water and sewerage bills also rose strongly this year as did vehicle excise duty, which all pushed the headline rate up to its highest level since the beginning of last year.

"This was partially offset by falling prices for motor fuels and clothing, driven by heavy discounting for children's garments and women's footwear." The consumer prices index measure of inflation is closely-watched as rising numbers make it difficult for the Bank of England to cut interest rates - raised sharply by the Bank from December 2021 to tackle the infancy of the cost of living crisis. There have been four cuts since August last year, as easing inflation has allowed.

In advance of the ONS data, financial markets had fully priced in two further interest rate reductions this year, with no change expected at the Bank's next rate-setting meeting in mid-June. The inflation numbers also make for tough reading at the Treasury, where Chancellor Rachel Reeves is juggling several challenges.

While the recent economic growth figures have been encouraging, economists widely expect hikes to consumer bills to apply a further choke to consumer spending in the months ahead. Ms Reeves said: "I am disappointed with these figures because I know cost of living pressures are still weighing down on working people.

"We are a long way from the double digit inflation we saw under the previous administration, but I'm determined that we go further and faster to put more money in people's pockets. "That's why we have increased the minimum wage for millions of working people, frozen fuel duty to protect commuters and struck three trade deals in the past two weeks that will go towards cutting bills." Read more from Sky News:M&S warns of £300m hacking hit and months of disruptionTalks to end Birmingham bin strikes 'sabotaged' Economists have questioned whether the inflation numbers may have also been pushed higher due to firms passing on costs after the chancellor's decision to raise employer national insurance contributions and the minimum wage last month.

Shadow chancellor Sir Mel Stride blamed Labour's "damaging" tax increase for the rise in inflation. He said: "We left Labour with inflation bang on target, but Labour's economic mismanagement is pushing up the cost of living for families - on top of the £3,500 hit to households from the chancellor's damaging jobs tax.

"Families are paying the price for the Labour chancellor's choices.".