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UK Inflation Hits 15-month High as Utility Bills Soar

A shopper looks for items at the dairy section as she shops at a Checkers outlet in Johannesburg, South Africa, May 20, 2025. REUTERS/Siphiwe Sibeko
A shopper looks for items at the dairy section as she shops at a Checkers outlet in Johannesburg, South Africa, May 20, 2025. REUTERS/Siphiwe Sibeko
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UK Inflation Hits 15-month High as Utility Bills Soar

A shopper looks for items at the dairy section as she shops at a Checkers outlet in Johannesburg, South Africa, May 20, 2025. REUTERS/Siphiwe Sibeko
A shopper looks for items at the dairy section as she shops at a Checkers outlet in Johannesburg, South Africa, May 20, 2025. REUTERS/Siphiwe Sibeko

Britain's annual inflation rate surged more than expected in April as energy and water bills rose sharply, official data showed on Wednesday.

The Consumer Prices Index soared to 3.5 percent last month, up from 2.6 percent in March, the Office for National Statistics said in a statement. Analysts' consensus forecast had been for a jump to 3.3 percent, AFP reported.

At 3.5 percent, the headline rate was the highest since the beginning of 2024, the ONS noted.

"I am disappointed with these figures because I know cost of living pressures are still weighing down on working people," finance minister Rachel Reeves said in a statement.

UK regulators allowed private companies to hike household bills from April, taking into account movements in oil and gas markets and indebted water providers.

"Significant increases in household bills caused inflation to climb steeply," ONS acting director general, Grant Fitzner, said in a statement.

"Gas and electricity bills rose... compared with sharp falls at the same time last year."

He noted that "water and sewerage bills also rose strongly... as did vehicle excise duty, which all pushed the headline rate up to its highest level since the beginning of last year".

Energy bills are expected to drop from July, however, following recent heavy falls to oil prices in the wake of US President Donald Trump's tariffs blitz, according to analysts.

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Oil Slips as Iran-Israel Conflict Enters Sixth Day

FILE PHOTO: A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia, June 4, 2023. REUTERS/Alexander Manzyuk/File Photo
FILE PHOTO: A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia, June 4, 2023. REUTERS/Alexander Manzyuk/File Photo
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Oil Slips as Iran-Israel Conflict Enters Sixth Day

FILE PHOTO: A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia, June 4, 2023. REUTERS/Alexander Manzyuk/File Photo
FILE PHOTO: A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia, June 4, 2023. REUTERS/Alexander Manzyuk/File Photo

Oil prices fell on Wednesday, after a gain of 4% in the previous session, as markets weighed up the chance of supply disruptions from the Iran-Israel conflict and as they ponder a direct US involvement.

Brent crude futures fell 93 cents, or 1.2%, to $75.52 a barrel by 0918 GMT. US West Texas Intermediate crude futures fell 88 cents, also 1.2%, to $73.96 per barrel.

US President Trump warned on social media on Tuesday that US patience was wearing thin, and called for an "unconditional surrender" from Iran.

While he said there was no intention to kill Iran's leader Ali Khamenei "for now," his comments suggested a tougher stance toward Iran as he weighs whether to deepen US involvement.

A source familiar with internal discussions said one of the options Trump and his team are considering included joining Israel on strikes against Iranian nuclear sites.

A direct US involvement threatens to widen the confrontation further, putting energy infrastructure in the region at higher risk of attack, analysts say.

"The biggest fear for the oil market is the shutdown of the Strait of Hormuz," ING analysts said in a note.

"Almost a third of global seaborne oil trade moves through this chokepoint. A significant disruption to these flows would be enough to push prices to $120 [a barrel]," the bank added.

Iran is OPEC's third-largest producer, extracting about 3.3 million barrels per day (bpd) of crude oil.

Meanwhile, Iranian ambassador to the United Nations in Geneva Ali Bahreini said on Wednesday that Tehran has conveyed to Washington that it will respond firmly to the United States if it becomes directly involved in Israel's military campaign.

Markets are also looking ahead to a second day of US Federal Reserve discussions on Wednesday, in which the central bank is expected to leave its benchmark overnight interest rate in the range of 4.25% to 4.50%.

However, the conflict in the Middle East and the risk of slowing global growth could potentially push the Fed to cut rates by 25 basis points in July, sooner than the market's current expectation of September, said Tony Sycamore, market analyst with IG.

Lower interest rates generally boost economic growth and demand for oil.

Confounding the decision for the Fed, however, is the Middle East conflict's potential creation of a new source of inflation via surging oil prices.

US crude stocks fell by 10.1 million barrels in the week ended June 13, market sources told Reuters, citing American Petroleum Institute figures on Tuesday. Official Energy Information Administration data is due later on Wednesday.