Inflation fell faster than expected in April, as the Consumer Price Index rate fell to 2.8%.
Marking the lowest rate of inflation in just over a year, the index fell in large part thanks to a downward swing in food inflation.
Food and non-alcoholic beverage prices increased just 3% in the 12 months to April 2026, compared to the 3.7% recorded in March.
Including housing, inflation fell to just 0.8% over the past 12 months, according to the ONS figures.
But the ONS warned that the cost of raw materials and manufactured goods had continued to rise, as higher oil and petrol prices start to bite in the supply chain.
“With all the talk of rising prices some people might be scratching their heads that the headline inflation figure for April came in at just 2.8%, significantly down on where it landed in March,” said AJ Bell head of financial analysis Danni Hewson.
“But this bright spot is set to be relegated to the past in the months to come. Inflation on motor fuels is already at the highest levels since September 2022 and input costs going into our factories hit 7.7% in April.”
Economists at the BRC and FDF have warned of severe food inflation should the conflict between the US, Israel and Iran continue, and oil and gas supplies remain disrupted.
The FDF has stuck by estimates food inflation will hit 9%-10% by the end of 2026 if the crisis is not resolved.
IGD forecasts are significantly lower, putting food inflation between 4.3%-5.3% as an average over 2026.
This morning, The Grocer revealed that a shock plan to persuade supermarkets to cap the prices on essential food products had come straight from No 10.
A leading source told The Grocer several supermarkets had been approached by the prime minister’s officials about implementing a voluntary scheme.
The approaches directly followed proposals by the SNP to impose mandatory caps on staple products like bread, eggs and milk.
Around 20% of the world’s oil and gas shipments used to pass through the Iran-controlled Strait of Hormuz, until the US assassination of Iran’s top leadership sparked war at the end of February.
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