The rate of inflation increased at its fastest rate on record last month, according to new official figures
The rate of Consumer Prices Index inflation increased to nine percent in April from seven percent in March, the Office for National Statistics (ONS) has said.
It was the fastest measured rate since records began in 1989, and the ONS estimates it was the highest since 1982.
A large portion of the rise was due to the price cap on energy bills, which was hiked by 54 percent for the average household at the start of April.
Grant Fitzner, chief economist at the ONS, said: “Inflation rose steeply in April, driven by the sharp climb in electricity and gas prices as the higher price cap came into effect.
“Around three-quarters of the increase in the annual rate this month came from utility bills.
“We have also published new modeled historical estimates today which show that CPI annual inflation was last higher 40 years ago.”
Chancellor Rishi Sunak stressed that the issue is global, insisting the Government “cannot protect people completely”.
He said: “Countries around the world are dealing with rising inflation.
“Today’s inflation numbers are driven by the energy price cap rise in April, which in turn is driven by higher global energy prices.
“We cannot protect people completely from these global challenges but are providing significant support where we can, and stand ready to take further action.
“We’re saving the average worker £ 330 a year through reducing National Insurance Contributions, changing Universal Credit to save over a million families around £ 1,000 a year, and providing millions of families with £ 350 each this year to help with their energy bills . “
Shadow Chancellor Rachel Reeves said the rate of inflation hitting nine percent in April would be “a huge worry for families already stretched”.
And she confirmed the Labor Party will be forcing a vote for an Emergency Budget today, ramping up pressure on the Government to do more to help struggling families.
She said: “We can’t wait any longer for action from this out-of-touch Government.
“Today, Labor force a vote for an Emergency Budget and for a plan for growth.
“The Tories must back it.”
The Confederation of British Industry warned of a “historic squeeze” in household finances and a “tough trading environment” for businesses.
The business organization increased pressure on Mr Sunak to bring forward extra help to deal with the rising cost of living.
CBI chief economist Rain Newton-Smith said: “Inflation was always likely to hit hard in April given the energy price cap increase.
“Looking ahead, inflation is likely to stay high, with a resulting historic squeeze in households’ incomes and a tough trading environment for businesses. It is critical the Government explores options to help people facing real hardship now, and support cashflow for vulnerable firms.
“Stimulating business investment is also crucial, to both plug the near-term gap in growth and to shore up the economy’s potential to withstand future shocks.
“Turning good intentions on a permanent investment deduction into a firm commitment, setting out an infrastructure roadmap and publishing a digital strategy are steps which can be taken without delay.”
The British Chambers of Commerce said the “unprecedented” impact of rising inflation meant a “real chance” of a recession later this year.
BCC head of economics Suren Thiru called for Rishi Sunak to reverse the rise in National Insurance Contributions and cut VAT on business energy bills to five percent.
He said: “The jump in UK inflation in April is eye-watering and underscores the growing cost-of-living crisis facing households and the damaging squeeze on firms’ ability to invest and operate at full capacity.
“The marked acceleration in the headline rate in April reflected the continued upward pressure on prices from surging energy and commodity costs, as well as the energy price cap rise and the reversal of the VAT reduction for hospitality in the month.
“The scale at which inflation is damaging key drivers of UK output, including consumer spending and business investment, is unprecedented and means there is a real chance the UK will be in recession by the third quarter of the year.”