Figures from the Office for National Statistics (ONS) showed inflation jumped to 3.5% in the year to April, higher than the 3.3% predicted by analysts polled by Reuters and well above March’s 2.6% rate.
The rise was driven by higher energy costs after regulators raised the household price cap, as well as a jump in water bills, the ONS said. Higher airfares also contributed.
Kate Nicholls, chief executive of UKHospitality, described the increase as ‘unsurprising’, noting the raft of additional costs from the Budget such as the hike in employer National Insurance contributions.
“This significant increase in inflation is unsurprising given the £3.4bn in annual cost increases that hit hospitality in April,” she said.
“It’s clear that, on top of continuing hikes in utility prices, the raft of additional costs from the Budget, which came into force in April, is putting unsustainable cost pressure on already strapped businesses. Regrettably, that forces up prices and so fuels inflation.
“This strengthens the need to tackle the ongoing cost of doing business crisis.
“The Government must look to bring down costs for businesses and it’s critical that the Bank of England meets market expectations to lower interest rates in the coming months.”