Higher energy prices push inflation back above 2pc target

British inflation rose last month by less than the Bank of England and investors had expected, but still hit its highest level this year, pushed up by a rise in energy bills.

Inflation, measured by the important Retail Price Index - which is linked to rail fares, student loans and index-linked government bonds - jumped from 2.4 per cent in March to 3 per cent in April.

Electricity and gas prices were the biggest driver of inflation last month, the ONS said.

The ONS said electricity and gas prices rose between March and April 2019 by 10.9% and 9.3%, respectively.

U.S. Suspects Chemical Attack In Syria, Denounces Russian 'Disinformation Campaign'
On May 18, Syrian government forces unilaterally ceased fire in the area but militants continue to attack their positions. "The regime's attacks against the communities of northwest Syria must end", she said.

The timing of Easter was also a factor in pushing up the cost of living, with airlines increasing prices by 26% in response to stronger demand for flights over the holiday period. Prices of games, toys and hobbies fell, particularly computer games, the ONS said. However, this was below the 2.2 per cent that had been forecast by economists.

The measure of price rises had stood at 1.9% in both March and February, up from a two-year low of 1.8% in January. The increase sent the average household bill up more than 14pc compared to a year ago, while gas bills rose by 7.1pc. The unexpectedly strong performance of the United Kingdom economy, however, has increased the Bank of England's ability to sustain an interest rate rise if it's deemed necessary.

"In principle, this is another reason to think the Bank of England will keep rates on hold for the foreseeable future", ING economist James Smith said.

United Kingdom unemployment dropped to its lowest rate since 1974, with earnings growth rising faster than inflation and weak productivity growth leaving companies so far accepting squeezed margins rather than raising prices. "If this trend continues, it could well choke off the recent improvement in consumer spending, a key driver of United Kingdom growth", he said. Samuel Tombs, economist at Pantheon Macroeconomics, said that with Brexit related uncertainties intensifying "it is easy to envisage circumstances in which it would fall significantly further".

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