UK Inflation Hits 15-Month High Amid Rising Household Bills

UK inflation surged to its highest level in over a year in April, with the Consumer Price Index rising to 3.5-3.6% year-over-year, surpassing forecasts and the Bank of England's 2% target. The increase was largely driven by sharp rises in household energy, water bills, higher business taxes, and a wage increase, contributing to persistent inflationary pressures. The spike has cast doubt on the Bank of England’s plans for further interest rate cuts, with its chief economist warning that borrowing costs may have been reduced too aggressively. This inflationary environment lifted the Pound Sterling against the US Dollar, which weakened amid speculation of the US favoring a weaker currency. UK Finance Minister Rachel Reeves expressed disappointment over the inflation figures, highlighting ongoing cost-of-living pressures, while political figures debated the causes and responses, with differing views from Labour and Tory representatives. Economists expect inflation to remain above 3% through 2025, though some easing may occur in 2026 due to recent trade developments.