UK Inflation Falls to 2.8% as Energy Cap Kicks In
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- Office for National Statistics reported UK inflation fell to 2.8% in April, below the 3% forecast.
- Ofgem's energy price cap, introduced on April 1, helped lower electricity and gas prices, contributing to the inflation drop.
- Rachel Reeves is expected to announce reforms giving Parliament authority over critical energy schemes, addressing pressure over rising energy costs.
- Bank of England market participants anticipate a 25‑basis‑point rate hike to 4% in July, though the MPC may hold rates at its June 18 meeting amid fragile growth and rising unemployment.
- George Brown of Schroders warned that higher energy prices could push inflation above 4% later this year, reversing the recent decline.
Why it matters: Consumers see a brief dip in living‑cost pressure, but households risk higher bills as energy prices rebound; the Treasury’s new authority will give Parliament power over critical energy schemes, while a BOE rate hike would raise borrowing costs.
