While RPI fell, from 5.3% to 5.2%, the rise in CPI was far beyond expectations of a slight rise to 4.1% or 4.2%. The ONS said that the largest upward pressures came from transport, notably a 29% rise in air fares between March and April 2011 due to “the timing of Easter”. This compares with a 1% fall in fares between the same two months in 2010.
A decrease in excise duty in April 2011, compared with a rise in April 2010, helped place downwards pressure from petrol and diesel on transport costs, the ONS added.
Other upward pressures came from a record 5.3% rise in alcoholic beverages and tobacco; gas prices, meanwhile, remained flat compared with a fall of 2.9% a year previous.
With Bank of England governor Mervyn King having already suggested that inflation could hit 5% by the end of 2011, today’s data appear to confirm that March’s unexpected drop in CPI was, for now, an anomaly rather than the start of easing price pressures.
“Worryingly, core inflation was a major driver of the bigger than expected jump, which suggests that underlying inflationary pressure within the UK economy is rising,” says Azad Zangana, European economist at Schroders.
“There is now a significant risk of second round wage effects coming through later in response to the higher inflation we expect to see in the coming months. We think this will prompt the Bank of England to act sooner rather than later, with an August interest rate rise looking very likely.”