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UK households were battered by a "wave of price hikes" in April, pushing inflation to its highest level in over a year, according to official figures released by the Office for National Statistics (ONS). The Consumer Prices Index (CPI) surged to 3.5% in April, a significant leap from 2.6% in March, marking the sharpest monthly increase since October 2022, during the peak of the energy crisis. This latest jump also represents the highest inflation rate recorded since January 2024.
Economists had anticipated a more modest rise to 3.3%, but a confluence of major cost increases, many taking effect due to Chancellor Rachel Reeves's Autumn Budget, propelled inflation higher than forecast. Among the most impactful changes was a 6.4% rise in the energy price cap.
The Full List of Bill Hikes Under Rachel Reeves's Watch
Energy Bills: Customers on variable tariffs saw their energy bills climb by 6.4% as Ofgem's new price cap came into effect. This pushed the average annual bill for a typical dual-fuel household from £1,738 to £1,849, adding approximately £9.25 a month, or £111 annually. Ofgem, the energy regulator, reviews the price cap quarterly and attributed this latest hike to increasing wholesale gas costs.
Water Bills: Households across England and Wales were hit with an average annual increase of around £123, or roughly £10 per month, in their water bills from April. This brings the average annual bill to approximately £603. The water regulator, Ofwat, has sanctioned companies to raise average bills by £31 a year, totalling £157 over the next five years to reach £597 by 2030. This is intended to help finance a colossal £104 billion upgrade program for the sector. The exact increase varied depending on the water supplier, meaning some households faced even steeper rises than the average.
The cumulative burden of these rising costs is already raising alarms across various sectors. A joint letter from 81 major retailers, including giants like Tesco, Amazon, and John Lewis, warned of the severe consequences: "The sheer scale of new costs and the speed with which they occur create a cumulative burden that will make job losses inevitable, and higher prices a certainty."
Broader Price Increases
Beyond essential utilities, consumers also felt the pinch in other areas:
- Food and Non-Alcoholic Beverages: Prices in this category rose by 3.4% in the 12 months to April 2025, up from 3% in the 12 months to March.
- Recreation and Culture: Overall prices for recreation and culture saw a 3.1% increase in the 12 months to April 2025, an uptick from 2.4% in March.
- Transport: The transport division experienced a significant jump, with prices rising by 3.3% in the 12 months to April 2025, compared to just 1.2% in March.
Tax Changes Further Squeeze Wallets
Chancellor Rachel Reeves's Autumn Budget introduced several tax adjustments that came into effect in April, adding to the financial strain:
- Stamp Duty: The temporary Stamp Duty discount was removed in April, making property purchases more expensive. First-time buyers, who previously paid no stamp duty on homes up to £425,000, now see this threshold revert to the usual £300,000. For all other buyers, the tax-free threshold dropped from £250,000 back to £125,000.
- Vehicle Excise Duty (Road Tax): April ushered in one of the most significant road tax shake-ups in nearly a decade. The standard road tax rate for vehicles registered after April 2017 increased by £5, bringing it to £195 this year. Notably, even electric, zero, and low-emission vehicles, previously exempt, are now subject to road tax, with the lowest rate set at £10 for the first year, rising to £195 in subsequent years.
Grant Fitzner, acting director-general of the ONS, commented on the findings: "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."
