UK inflation jumps to 3.5%
Larger than expected hike cast doubts on speed of rate cuts as full impact of tariff war is yet to be felt.
21st May 2025 07:52
by Myron Jobson from interactive investor
Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “The jump in inflation in April was always on the cards due to the rise in energy bills, but it has exceeded forecasts – marking the highest rate in over a year. It underlines the fact that the path back to target inflation is far from straightforward.
- Our Services: SIPP Account | Stocks & Shares ISA | See all Investment Accounts
“Core inflation, which strips out volatile food and fuel prices to provide a clearer picture of the underlying trend, has also edged higher, raising questions over whether this could slow the Bank of England’s interest-rate cutting cycle. That remains to be seen. What’s clear is that the need to turbocharge economic growth – particularly amid growing uncertainty stemming from Trump's tariff war – remains a key priority.
“While the increase might come as a shock to households, it’s important to remember that CPI inflation is an annual measure, comparing prices to what they were a year ago.
“Britons should approach headline inflation figures with perspective. Everyone has an inflation rate that is unique to them, depending on their individual spending habits. It’s crucial to focus on maintaining financial resilience in uncertain times – whether by reviewing budgets, building up emergency savings, or managing debt – to better weather any bumps along the road ahead.”
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.