The jump to 1.5% in April from 0.7% in March means consumer prices are rising at their fastest rate since the start of the pandemic.
It is also the largest month-on-month increase in over a decade.
Debapratim De, senior economist at Deloitte, said:
“April's price rises provide an early indication of the inflationary environment we are likely to see as activity picks up over the summer months. Supply has struggled to keep up as the economy whirrs into action, with input prices rising at their fastest pace in more than four years. But ample spare capacity and labour market slack should limit longer-term price pressures.”
Steven Cameron, Pensions Director at Aegon comments:
“Today’s figures showed that consumer price inflation jumped to 1.5% per cent for the year to April from 0.7 per cent the previous month. While this is still within the Bank of England’s 2% target it does serve as a cautionary tale for the direction of travel for inflation in the UK. As the door to the economy reopens the expectation is that consumers will rush to spend savings built up over lockdown. There is concern that this creates inflationary pressures that pushes rates well beyond both the target and anything that consumers have had to deal with in recent years or for many in living memory.
“A sustained period of low inflation has blunted people’s fear of inflation. There’s now a growing realisation that high inflation could be around the corner, which reduces individual’s purchasing power and what they could buy with their savings over time. Keeping money in the bank typically earns interest, but if the interest rate is lower than inflation, money or purchasing power is effectively being lost. With interest rates at historic lows, just scraping above zero, any amount of inflation raises challenges for savers.”
