Inflation picked up sharply in April, driven by rising costs in housing, transport and services, with the Consumer Prices Index (CPI) increasing by 3.5% in the 12 months to April 2025, up from 2.6% in March, according to figures released by the Office for National Statistics (ONS).
The broader CPIH measure, which includes owner occupiers’ housing costs, rose by 4.1% over the same period, up from 3.4% in March. On a monthly basis, both CPI and CPIH increased by 1.2%, compared to 0.3% and 0.5% respectively in April 2024.
The most significant upward pressure on inflation came from housing and household services, transport, and recreation and culture. These were partially offset by falling prices in clothing and footwear.
Core CPI – which strips out volatile items such as energy, food, alcohol and tobacco – also accelerated, rising to 3.8% in the year to April from 3.4% the previous month. Similarly, core CPIH rose to 4.5%, up from 4.2%.
The breakdown shows services inflation continuing to drive much of the pressure. CPI services inflation rose from 4.7% to 5.4%, while CPI goods inflation increased from 0.6% to 1.7%. For CPIH, goods inflation rose to 1.7%, and services to 5.8%.
Nathan Emerson, CEO at Propertymark, said: “Today’s numbers will likely come as a disappointment to many across the country. It remains vital that the UK economy delivers growth, to help keep inflation on track with the Bank of England’s 2% target or below. There is positive news that the wider global economy is responding to a calming down of international trading relationships, which will prove influential to the domestic economy.
“Housing plays a central role in boosting overall growth in the UK, and with the summer months being historically busy for the housing market, it’s likely that momentum will continue throughout this period, despite the economic turbulence across the first quarter of 2025.
“Inflation increasing may deter the Bank of England from dropping interest rates on 19 June; however, when the time is right, we hope to see them fall and more competitive mortgage deals appear across the lending spectrum.”
Yesterday, the Bank of England’s chief economist Huw Pill warned that the central bank has been cutting rates too quickly and argued its policymakers should have held the level unchanged given ongoing inflationary persistence.
Ben Thompson, Deputy CEO, Mortgage Advice Bureau, added: “Encountering this particular bump in the road was widely expected and forecasted. However, inflation rising to 3.5% shouldn’t discourage homebuyers from taking their first, or next, step on the property ladder, especially with summer proving the most popular time to move.
“In fact, our research revealed that 72% of our customers moved to a new property in the summer of 2024, which was actually just before mortgage rates started falling from their recent highs.
“With more innovation across the market than ever before, including a host of sub-4% rates, there’s never been a better time to buy. Speaking to a broker is essential, as with their market insight and expertise, you may actually end up being mortgage ready sooner than you think.”
Richard Pike, chief sales and marketing officer at Phoebus, concluded: “Today’s inflation data reinforces how persistent price pressures remain in the UK economy, driven largely by a rise in regulated prices like water and utility bills, which came into force last month. With wage costs also high, expectations of an imminent base rate cut are likely to be tempered.
“For the housing and mortgage market, this adds to the sense of uncertainty. A longer wait for rate cuts means continued pressure on affordability, both for prospective buyers and those coming to the end of fixed deals. While lenders have shown a willingness to compete, particularly in the remortgage space, volume recovery may be more gradual.”
