British inflation slowed in April from a record high as the cost of household bills fell sharply, official data showed today.
The Office for National Statistics said consumer prices rose 0.3 per cent last month and 2.8 per cent on the year. That was down from 3.1 per cent in March, a level that had forced the central bank to write an explanatory letter to the government.
Analysts had predicted the latest easing, and the figures are unlikely to settle the debate about whether interest rates need to rise again after the Bank of England hiked them to 5.5 per cent last week.
Markets are pricing in a good chance of rates rising to 5.75 per cent in the next few months - which would be the fifth hike since August last year. Analysts are awaiting the Bank of England's new inflation and economic growth forecasts on tomorrow
The chief reason for inflation slipping from its series high was a fall in gas and electricity bills as the major providers took on board lower global energy prices after last year's oil spike.
The ONS said these bills cut the CPI rate by 0.23 percentage points. A number of utility companies have announced further price cuts that have yet to take effect.
Retail price inflation, on which most pay deals are based, eased to 4.5 per cent from a 16-year high of 4.8 per cent, also as expected.