Britain's inflation rate jumped the most since 2002 to the highest in more than a year, making it harder for the Bank of England to cut interest rates to support economic growth.
Consumer prices climbed 3 percent from a year earlier, compared with 2.5 per cent in March, the Office for National Statistics said today in London.
The result was the highest in 13 months and exceeded the 2.6 per cent median prediction of 37 economists in a Bloomberg News survey. Prices rose 0.8 per cent on the month, the most in almost seven years.
"The short-run inflation picture looks pretty dire," said Dominic White, an economist at ABN Amro Holding NV and a former UK Treasury official. "There are pretty obvious inflation pressures coming through in the next few months and that will limit the degree to which the Bank of England can cut rates."
Inflation, stoked by food and energy costs, is now within 0.1 percentage point of the government's upper limit, adding to the danger that higher consumer prices become entrenched in the economy.
That may hinder policy makers as they seek to lower the benchmark interest rate to avert a recession after three reductions since December to the current 5 per cent.
Governor Mervyn King will signal whether the central bank has scope for further interest-rate cuts when he presents the bank's quarterly inflation forecasts tomorrow.
Inflation has exceeded the central bank's 2 per cent target for seven months. The 0.5 percentage-point increase in the rate from March was the biggest jump since July 2002.
Bloomberg