‘Eye-watering’ inflation rise expected driven by fuel bills
A RECORD rise in energy bills has seen inflation hit a 40-year high, figures are expected to show next week.
Fuel prices and retailers passing on a jump in costs have also led to the “eyewatering” figures, set to be confirmed by the Office for National Statistics.
The rate of inflation reached a 30-year peak of seven per cent in March.
But after a forecast of a leap in energy prices at the start of April, that will have jumped to anything from 8.5 per cent to more than nine per cent when the ONS publishes its data on Wednesday.
Sarah Coles, an analyst at stockbroker Hargreaves Lansdown, said: “We’re going to get some eye-watering price rises in the inflation figures because this is the month when the energy price cap hike feeds into the data.”
Last month’s expected spike in the consumer prices index comes after regulator Ofgem increased its price cap on standard tariff energy prices by an average 54 per cent from April 1.
It took the average annual gas and electricity bill to £1,971. The Bank of
England forecasts typical energy bills could spiral by another 40 per cent to around £2,800 in the autumn.
While the average forecast for CPI in April is 8.9 per cent, consultants Capital Economics predict it could be 9.2 per cent, a 40-year high.
Ruth Gregory, its senior UK economist, said that along with high energy bills, the other factors that drove inflation last month were fuel prices and retailers passing on a jump in costs.
The Bank of England has warned inflation could top 10 per cent in October, as the economy risks slipping into recession.
Dr Jackie Mulligan, an expert on the Government’s High Streets Task Force and founder of website ShopAppy, said: “The cost-of-living crisis we’re facing is nothing short of a national emergency.
“People are already emotionally exhausted after two years of the pandemic and now they face another monumental struggle.”