Reeves owes us an apology

Consumer prices have risen faster than the City predicted and the chancellor’s policies are to blame

- James Moore

April was misery month for consumers, and it delivered its knockout blow with a surge in inflation, dashing hopes of cheaper borrowing.

The Consumer Prices Index leapt to 3.5 per cent from 2.6 per cent, after a pair of good months in which the figure came in below expectations. Not this time. The City had pencilled in 3.3 per cent.

The month-on-month rise in prices between April and March surged to 1.2 per cent from 0.3 per cent previously. Remember, these increases are cumulative. Needless to say, bad memories of cost of living crises were immediately revived.

The lorry-load of tax rises and bill increases that delivered a body blow to every household and business budget in Britain were the guilty parties. Water bills, mobile phones, gas and electricity prices, rail fares and higher taxes crash-landed on the country from 1 April, delivering a perfect storm.

Service price inflation was a notable blackspot in the data dump from the Office for National Statistics (ONS). The rate at which prices have been rising in this sector of the economy has been a longstanding bugbear for the rate-setters on the Bank of England’s monetary policy committee (MPC). Recent signs of progress, in which the rate dipped below 5 per cent, went into a hard reverse. The number increased to 5.4 per cent from 4.7 per cent, shattering expectations in the process.