Inflation jumped to its highest level in two-and-a-half years last month, official figures have revealed – tightening the squeeze on household spending power.
The consumer prices index (CPI) rate of inflation increased to a higher-than-expected 4.5% in April from 4% in March, the Office for National Statistics said.
CPI was last higher in September 2008, when the rate hit a record high of 5.2%, and was last at 4.5% in October 2008.
The most significant month-on-month contribution to the rise in the cost of living came from air fares, which were driven up 29% by the timing of Easter, the ONS said. Elsewhere, the increase in excise duties on alcohol and tobacco had a major impact on CPI as prices rose 5.3% between March and April.
Economists had expected the rate to rise to 4.1%.
As inflation has been 1% higher than the Government’s 2% target for the last three months, Bank of England governor Mervyn King, who did not have sight of these figures when he and his colleagues held interest rates at 0.5% at their last meeting, will have to write a letter of explanation to Chancellor George Osborne.
It will be the sixth successive quarter in which Mr King has had to write such a letter.