Inflation as measured by the Office for National Statistics (ONS) Consumer Prices Index (CPI) measure of inflation was 2.8% in April.
The figure fell from 3.3% in March 2026, helped by lower electricity and gas prices following changes to the Ofgem price cap and government measures to reduce energy bills.
However, the relief may prove short-lived if higher wholesale energy and fuel prices linked to the Middle East conflict continue to feed through to household bills.
Housing and household services made the largest downward contribution to the inflation rate, while rising motor fuel prices prevented a larger fall.
Commenting on the data, Grant Fitzner, chief economist at the ONS, said: “There was a notable fall in annual inflation led by lower electricity and gas prices.
“This was due to the government’s energy bill support package reducing variable and fixed tariffs, along with lower global wholesale energy prices before the conflict in the Middle East, which fed through to the reduction in the Ofgem cap.
“Smaller rises in water and sewage bills and Vehicle Excise Duty than seen last year also helped pull the rate down. Food prices, particularly for chocolate and meat products, and the price of package holidays drove inflation down further.
“These were only partially offset by a further increase in petrol and diesel prices, and an uptick in the cost of clothing and footwear.”
Ofgem price cap
Despite lower energy prices helping to reduce inflation in April, this relief may be short-lived.
Cornwall Insight, which forecasts the Ofgem energy price cap, expects the cap for a typical dual-fuel direct debit household to rise by around 13% from July – equivalent to about £209 a year under current typical consumption assumptions.
Cornwall Insight, which analyses the energy market to forecast the Ofgem energy price cap, anticipates a 13% rise in the price cap – or £209 more per year on average for household energy bills – in July.
The forecast reflects higher wholesale energy prices, with the conflict in the Middle East adding pressure to global oil and gas markets.
The government has also announced that the temporary 5p fuel duty cut will be extended for the rest of the year, rather than being unwound from September as previously planned, in an effort to shield motorists from short-term volatility in petrol and diesel prices.
Reeves commented: “I’m keeping taxes down for drivers and businesses – putting money in the pockets of millions of workers and cutting costs for farmers and hauliers.
“The war in Iran is pushing up fuel prices here at home but after strong growth at the beginning of the year, I am stepping in to protect people at the pump
“By protecting households and businesses we are building a stronger and more secure economy for Britain. That is the right economic plan.”
Although inflation has eased, many families are still dealing with the cumulative impact of higher prices. Long-term financial planning can help ensure your finances remain resilient when costs, interest rates and market conditions change.
If you are concerned about how inflation could affect your income, savings, investments or retirement plans, please get in touch.
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