UK inflation slowed to 2.8% in April 2026, down from 3.3% the month prior, according to the Office for National Statistics (ONS).
The ONS noted that this was largely down to energy bills falling after Ofgem cut its price cap, bringing the typical dual-fuel bill down to £1,641 in April – £208 less than a year earlier.
Smaller increases in water bills and vehicle excise duty also helped, as did the timing of Easter, which pushed air fares down 3.3% against a 27.5% rise a year earlier.
When stripping out more volatile measures such as food and energy, core inflation rose 2.5% – down from 3.1% in March.
However, experts believe the drop in inflation is unlikely to last due to the impact of the Middle East conflict on petrol and diesel prices.
Danni Hewson, head of financial analysis at AJ Bell, said: “This bright spot is set to be relegated to the past in the months to come, as inflation on motor fuels is already at the highest levels since September 2022 and input costs going into our factories hit 7.7% in April.”
The ONS said there was a 23% rise in motor fuel prices in the year to April – this compares with a 4.9% rise in the year to March.
Sarah Pennells, consumer finance specialist at Royal London, warned that Ofgem’s next price cap announcement – expected before the end of this month – will likely set the energy price cap “significantly higher than its current level”, which will push bills up for millions.
George Brown, senior economist at Schroders, said that higher energy prices will “likely lift inflation to above 4% this year”.
Markets expect this to weigh heavily on the Bank of England’s next decision on interest rates. The Bank previously held rates at 3.75% in April but warned it was prepared to increase rates if inflation continued to rise. The Bank is next set to meet in June.
“What matters now is whether [the increase in inflation] starts to bleed into broader price and wage setting,” said Brown.
The latest inflation figures follow recent jobs market data, which revealed a spike in unemployment, even as the International Monetary Fund (IMF) positively revised its forecast for UK GDP growth in 2026.
“A softening labour market and fragile growth should limit that risk, but the Bank of England can ill afford to be complacent after years of successive global supply shocks,” Brown said.
He expects the current landscape will keep the Bank “sounding hawkish” but suggested it will ultimately stop short of hiking rates.
However, Hewson added that the current picture must also account for last year’s “double whammy” of employer National Insurance rises and an increase in the national living wage, which was much lower in 2026, “so that is something that will be carefully monitored by the Bank of England rate setters trying to keep their balance on the economic tightrope”.
The IMF has stated that the UK’s central bank would be well-placed to hold rates steady over the course of the year, Hewson noted.
“Whilst markets aren’t convinced that will be the outcome, today the expectation is that rate hikes will be slower and fewer this year than had previously been priced in,” she said.