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| UK inflation rate rises to 4.5% in April | UK inflation rate rises to 4.5% in April |
| (40 minutes later) | |
| The UK Consumer Prices Index (CPI) annual rate of inflation rose to 4.5% in April, up from 4% in March. | The UK Consumer Prices Index (CPI) annual rate of inflation rose to 4.5% in April, up from 4% in March. |
| The rise was due to a jump in transport costs, particularly Easter rises in air and sea fares, and alcohol and tobacco. | |
| However, the Retail Prices Index (RPI) measure of inflation - which includes mortgage interest payments - fell slightly to 5.2% from 5.3% in March. | However, the Retail Prices Index (RPI) measure of inflation - which includes mortgage interest payments - fell slightly to 5.2% from 5.3% in March. |
| The rise in CPI was bigger than analysts had forecast and follows a surprise fall in the index last month. | The rise in CPI was bigger than analysts had forecast and follows a surprise fall in the index last month. |
| CPI is now at its highest level since October 2008. | CPI is now at its highest level since October 2008. |
| The Office for National Statistics (ONS) said "by far the largest upward effect" on prices came from air transport, where fares rose by 29% between March and April. Sea fares rose by 22.3%. | The Office for National Statistics (ONS) said "by far the largest upward effect" on prices came from air transport, where fares rose by 29% between March and April. Sea fares rose by 22.3%. |
| It said the fact that Easter was in April this year but in March last year partly explained the jump in prices. | It said the fact that Easter was in April this year but in March last year partly explained the jump in prices. |
| Alcoholic drinks and tobacco rose by a record 5.3% in April. | Alcoholic drinks and tobacco rose by a record 5.3% in April. |
| These price rises more than offset a 1.3% fall in clothing and footwear prices. | |
| Higher fuel bills | |
| In March, inflation had fallen to 4% from 4.4% in February. | |
| The return of accelerating price rises after March's respite will put further pressure on the Bank of England to raise rates sooner rather than later, analysts suggested. | |
| "April's rise in CPI inflation confirms that March's drop was just a temporary reprieve - inflation will probably get to 5% or above over the coming months," said Vicky Redwood at Capital Economics. | |
| Last week, the Bank of England said it expected inflation to hit 5% later this year, largely due to higher utility bills. | |
| It still expects inflation to fall back towards the Bank's target rate of 2% towards the end of next year. | |
| April was the 17th month in a row that the inflation rate was at least one percentage point above target. | |
| The Bank has resisted calls to raise interest rates - seen as the most effective policy tool in combatting inflation - on the basis that temporary, external factors, such as rising oil and food costs, are driving price rises. | |
| For this reason, earlier this month it held rates at a record low of 0.5% for the 26th month in a row. | |
| However, for the previous three months, three members of the Bank's rate-setting Monetary Policy Committee have voted to increase rates. | |
| The increasing pressure to raise rates following April's jump in the inflation rate was reflected in the currency markets, where the pound rose by more than half a cent against the dollar to $1.6285, and by almost 0.4 cents against the euro, to 1.1460 euros. |