April was a bad month for families across the UK. This has all increased the cost of living since the privatization, the highest increase in energy costs, broadband costs and water fees (although public anger at providing quality).

Economists predict that inflation will increase based on the increase in annual notes. However, at a rate of 3.5% (the highest interest rate in the G7), the rise is greater than the city's forecast of 3.3% growth and will cause concerns from the Bank of England.

Much of the growth comes down to energy costs, as OFGEM consumer prices rose by 6.4%. However, the leap in water and sewage bills was much larger, with prices rising 26.1%, the biggest year-on-year increase since February 1988.

Although inflation has cooled for several months, it is clear that the title rate will increase due to changes in utility bills and many other price increases in April each year.

Inflation has approached its target of 2% since mid-last year, with peaking at over 11% at the end of 2022 after the surge in Russia’s invasion of Ukraine. Now it's up again, Threadneedle Street's forecast that it will peak at an average of 3.5% in the summer and it won't be able to recover to its 2% target until early 2027.

In general, inflation has extended the bank's target for so long, which would completely exclude interest rates from lowering. But the official borrowing cost at 4.25% is squeezing businesses and households as Donald Trump's trade war intensifies the global economy.

In this world, policymakers try to strike a balance between supporting inflation while supporting economic activity. Given that inflation in April was higher than expected, there were concerns that banks would not be able to reduce borrowing costs to the level of hope, even if economic uncertainty still increased.

However, there are some signs that the rise in inflation should be temporary. Business leaders have been warning the government about the impact of £2.5 billion raised by employers’ national insurance contributions (NICs) last month, transferring them to consumers at a higher price.

Economists say some evidence has sharply strengthened this month, from 4.7% to 5.4%, after inflation in April (more sensitive to labor costs). For many business groups, this is a clear sign that the fees are being passed.

However, the picture is not entirely clear. Most overshoots are Easter timing. The National Bureau of Statistics stressed that during this year's Easter holiday, travel and travel companies have raised prices significantly, it collected data on consumer prices. The inflation rate (measured price changes a year ago) has not collapsed because it collected long bank holiday weekends outside of last year's data.

Air fares rose 27.5% compared to March, with March rising in the second month recorded, while prices for entertainment and culture, especially for foreign holidays, also rose sharply.

In contrast, inflation rates in restaurants and hotels, especially industries exposed to higher labor costs, cooled in the month. Still, other economists point out that food inflation may also be affected by the increase in Nice, in which case price growth increased from 2.9% to 3.2%.

However, the impact of tax increases is a more obvious impact after data released earlier this month showed that unemployment rates reached their highest levels in nearly four years. This should focus on Threadneedle Street decision makers in the coming months.