20th May 2026
CPI inflation surprised to the downside falling by half a percentage point to 2.8 per cent in April – having been 3.3 per cent in March – bringing inflation to its lowest level since March 2025.
This puts the UK in the enviable position of being the only country in the G7 to see a fall in the rate of inflation since the war in the Middle East started in February.
But this is set to be one of the last falls for some time, as unwelcome future rises in the cost of essentials hits lower-income families hardest the Resolution Foundation said today (Wednesday).
The drop in April was driven in large part by falling energy bills following the removal of policy costs. Overall, household services contributed 0.5 percentage points to the fall in CPI inflation. There was also a larger-than-expected fall in services inflation – the Bank of England had forecast 3.4 per cent in April, already a steep drop from 4.5 per cent in March, but today’s data confirms a fall to 3.2 per cent – the biggest single-month decline in services inflation in more than 5 years.
These falls were partly offset by another steep rise in the cost of motor fuels. The average price of petrol rose by 16.6 pence per litre between March and April 2026 to £1.57, the highest price since November 2022. Diesel rose by 31.3 pence per litre to £1.90, the highest since July 2022.
The UK is the only G7 country to have seen headline inflation fall since February – down 0.2 percentage points – a position largely attributable to the energy price cap temporarily shielding British households from higher energy bills.
But that protection is not permanent. Energy bills will rise when Ofgem resets the price cap in July. Food prices – which can take up to 12 months to fully reflect shifts in global commodity costs – have yet to feel the full effect of elevated wholesale energy prices. Both rises will fall hardest on lower-income households, who spend a greater share of their budgets on these essentials.
The Foundation urges the Government to prepare targeted support for vulnerable households in case energy prices rise further this autumn – and to resist any response that amounts to a blank cheque if wholesale energy prices continue to climb.
James Smith, Chief Economist at the Resolution Foundation, said:
“Today’s fall in inflation is welcome – and unexpectedly large – but is probably one of the last drops before a run of rises that will hit low-income families particularly hard.
“The April fall in CPI inflation was driven by both the removal of policy costs from energy bills and the biggest monthly fall in services inflation in five years. This was partly offset by another steep rise in cost of petrol and diesel. The fall in inflation is good news but it does not mean cost of living pressures from the war have gone away – they are simply yet to be felt.
“The Government needs to get ahead of this. Targeted support for vulnerable households should be prepared now, so that if energy prices climb further between now and autumn, the response is swift and well-designed – not blank-cheque intervention.”