UK Inflation Drops to 2.8% but Expected to Rise Due to Iran War
Lower gas and electricity bills drove a bigger than expected drop in the UK’s inflation rate.
A Bigger Drop Than Expected
However, inflation is widely expected to rise from here. The ongoing impact of the Iran war is the main reason. The rate of inflation fell to 2.8% in the year to April. That is down from 3.3% in the year to March. The Office for National Statistics (ONS) said energy prices were lower. This was due to the government’s energy bill support package and lower wholesale prices before the conflict.
Inflation Expected to Rise
Analysts expect inflation to rise to about 4% by the end of the year. The Middle East conflict continues to add pressure on global prices. A lower rate of inflation does not mean prices are falling. It means prices are rising more slowly than before.
Fuel Prices Still High
The drop in inflation happened despite a rise in fuel prices due to the Iran war. Prices have reached highs not seen since 2022. The average price of petrol rose to 156.8p per liter last month. Diesel prices rose by more than 30p in April, taking the average to 190p per liter. Petrol prices have since hit a fresh high in May, reaching 158.52p a liter on Tuesday.
