UK inflation has risen to 3.5% in the 12 months to April from 2.6%, according to the latest Office for National Statistics data.

The largest upward contributions to the monthly change came from housing and household services, transport, and recreation and culture; the largest, partially offsetting, downward contribution came from clothing and footwear.

Last week, economists predicted inflation would rise to between 3.4% and 3.5%.

Deutsche Bank senior economist Sanjay Raja said: “April inflation will present the biggest test for the Monetary Policy Committee so far this year”.

While the jump in inflation in April was always on the cards due to the rise in energy bills, interactive investor senior personal finance analyst Myron Jobson says: “It has exceeded forecasts – marking the highest rate in over a year. It underlines the fact that the path back to target inflation is far from straightforward.”

“Core inflation, which strips out volatile food and fuel prices to provide a clearer picture of the underlying trend, has also edged higher, raising questions over whether this could slow the Bank of England’s interest rate cutting cycle. That remains to be seen.”

“What’s clear is that the need to turbocharge economic growth – particularly amid growing uncertainty stemming from Trump’s tariff war – remains a key priority.”

Just Mortgages and Spicerhaart chief executive officer John Phillips states: “The big question is how will this impact the future path of interest rates. What we do know is the central bank has been clear that it expected this rise in inflation and knows full well it is likely to creep up further before eventually coming down.”

“The real elephant in the room is the impact of Trump’s tariffs on global economies and international trade which is still unknown. With plenty of uncertainty, it’s likely we could see a pause in June before returning to cuts later in the year.”

“Base rate strategy has long been a tug of war between managing inflation and stimulating economic growth. While inflation has risen and is expected to increase, it does feel like the overall momentum is still shifting towards stimulating growth – particularly with the threat of economic uncertainty on the global stage.”

Chancellor Rachel Reeves adds: “I am disappointed with these figures because I know cost of living pressures are still weighing down on working people.”

“We are long way from the double digit inflation we saw under the previous administration, but I’m determined that we go further and faster to put more money in people’s pockets.”

The latest cost-of-living data comes after official figures showed last week that the UK economy grew by a larger-than-expected 0.7% in the first three months of the year. 

However, this data came before the 2 April move by US President Donald Trump to hike tariffs on more than 75 countries, which is expected to impact UK growth.

Earlier this month, the UK struck a deal with the US to reduce or remove tariffs on some UK exports, but the baseline 10% levy, which applies to many countries, will still be charged on most British goods entering the US.

The Bank of England lowered the base rate by a widely expected 0.25% on 8 May, which is the lowest level since May 2023. 

The bank also lifted its forecast for the UK economy to grow by 1% this year, marking an upgrade from the 0.75% growth predicted in its February report.    

But rate setters expect that energy prices “are still likely” to drive up inflation to 3.5% in the third quarter of the year, before “falling back thereafter”.    

Money markets expect between two and three further cuts this year to boost a subdued economy that faces tariff uncertainties. 

But many economists forecast that the Monetary Policy Committee may pause rate reductions at its next 19 June meeting to gauge how hot prices are running across the economy.

MPowered director of mortgages Peter Stimson comments: “The surge in inflationary pressure won’t just translate into a slowdown in base rate cuts. We’re in ‘handbrake on’ territory. The prospect of the Bank of England reducing its Base Rate again in June has shifted from slim to non-existent.”

“With the economy starting to expand at a decent clip, the Bank is now less concerned about stimulating growth. Getting inflation under control, and forcing it back down towards its 2% CPI target, is once again the Bank’s top priority.”

“It will have its work cut out, as there are some worrying trends below the surface of today’s inflationary numbers. And while a number of temporary factors make April’s spike look particularly bad, no-one should expect inflation to return to target by itself.”

“The swaps market – which determines mortgage interest rates – had already been pricing in a jump in inflation today and a delay in the next Base Rate cut.”

“But with Britain’s inflationary problem back with such vengeance, the odds on a Base Rate cut in August have lengthened too. The path towards lower interest rates will be longer and slower than thought as recently as just a few weeks ago.”