Stories

Wed, 20 May 2026

Wed, 20 May 2026 Inflation falls to 2.8% but is expected to rise from here

Energy prices were lower due to the government's energy bill support package and lower wholesale prices before the Iran war.

* UK inflation rate fell to 2.8% in the year to April, down from 3.3% in March
* Lower energy bills and wholesale prices contributed to the drop in inflation
* Analysts expect inflation to rise to around 4% by the end of the year due to ongoing impact of Iran war on global prices
* Fuel prices rose to highs not seen since 2022, with petrol averaging 156.8p per litre and diesel averaging 190p per litre
* Chancellor Rachel Reeves to reveal further cost of living support for households in anticipation of higher energy prices
* Shadow Chancellor Mel Stride criticises Labour's handling of the economy, saying prices are still rising too fast
* ONS chief economist Grant Fitzner notes that producer input prices rose by 7.7% in the year to April due to higher oil and petrol prices
* Food price inflation could reach 10% by the end of the year, according to the Food and Drink Federation
* Bank of England may not raise interest rates next month as domestic inflationary pressures are expected to be limited by external factors.