Higher energy bills have pushed inflation to a record high

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Inflation is at a record high this year in April, due to higher energy bills pushing up prices, the Office for National Statistics reveals.

 

The Consumer Price Index was 2.1% in April, an increase of 1.9% on March. This is higher than the 2% target projected by the Bank of England.

Video games and package holiday deals aided in offsetting the impact of higher energy bills, caused by the increase in Ofgem’s price cap on gas and electricity.

The Office for National Statistics (ONS) says gas and electricity prices rose by more than 10.9% and 9.3% in March and April 2019, respectively.

"The upward movement partially reflected the response from energy providers to Ofgem's six-month energy price cap, which came into effect from 1 April 2019," the ONS said.

In April, Ofgem increased its maximum prices that can be charged for gas and electricity, but only to those who have not switched energy suppliers and are on default tariffs.

Flights also pushed up the figures, due to the late running of Easter, and prices increased by 26.4% on the month.

Recreation and culture prices decreased by 0.8% between the two months, in comparison to an increase of 0.4% between the same two months in the year previous.

Prices of toys, games and hobbies dropped, particularly computer games, says ONS.

"Rising inflation alongside slowing wage growth is a concern, as it squeezes real household incomes. If this trend continues, it could well choke off the recent improvement in consumer spending, a key driver of UK growth," he said.

"While consumer prices are likely to drift slightly higher in the near term, the outlook for inflation remains relatively subdued, with the current pressure on prices largely due to a number of temporary factors, such as rising energy costs."

 

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