The annual change in the consumer prices index rose from 7 percent in March. Britons were braced for a steep rise in inflation in April following the reset in the government’s cap on household gas and electricity bills. That price cap, which is designed to protect some 22 million households, rose 54 percent, reflecting a surge in wholesale natural gas prices late last year.
About three-quarters of the increase in the annual rate of inflation in April came from the jump in household utility bills, said Grant Fitzner, chief economist at the statistics agency.
Prices were also pushed higher by increases at restaurants, after a pandemic-era cut to the value added tax, a type of sales tax, expired. Food prices also rose at a faster pace than last year.
Countries around the world are contending with levels of inflation they have not experienced in decades. In the United States, the inflation rate is hovering near a 40-year high and in the eurozone it is the highest on record.
There are several major causes. The reopening of economies after pandemic lockdowns squeezed supply chains and pushed up prices, as consumers flush with savings bought more goods.
Also, the war in Ukraine raised concerns about energy supplies from Russia and disrupted the export of wheat and other agricultural products from Ukraine. Prices for oil, natural gas, metals, fertilizers and other commodities have soared, darkening the outlook for the global economy and worsening food crises.
Increases in the cost of food are particularly troubling for the governor of the Bank of England, Andrew Bailey, who is tasked with keeping inflation at 2 percent. On Monday, he told lawmakers he was worried about food prices because of Ukraine’s inability to export agricultural products.
“That is a major worry, and not just for this country, but for the developing world as well,” he said. “Sorry for being apocalyptic for a moment, but that is a major concern.”
While the sharp rise in April’s inflation rate in Britain was expected, the pain of such fast and increasingly widespread price increases will be felt across households as inflation outstrips wage growth.
Pay excluding bonuses rose 4.2 percent from January through March, compared with the same period a year ago, data published Tuesday showed. High bonus payments kept total pay rates above inflation, but these bonuses were limited to certain sectors, and were especially strong in finance and business services.
For now, a tight labor market is adding to inflationary pressures because it encourages companies to pay employees more — although not enough to keep up with food and energy price increases. The unemployment rate declined to 3.7 percent in March, the statistics office said Tuesday, and for the first time in records going back to 2001, there are fewer unemployed people than job vacancies.
Pressure on the government to support people on low incomes trying to cope with the rising cost of living has intensified. Prime Minister Boris Johnson said last week that there would be more support announced in the coming months, as the Treasury’s resistance to additional measures appears to be softening.
Inflation is unlikely to have peaked. Economists expect another steep increase in the energy price cap when it is reset again in October and reflects the rise in energy prices since Russia invaded Ukraine. The Bank of England predicts that Britain’s inflation rate will peak above 10 percent in the last quarter of the year.
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