Inflation fell to 2.8% in the year to April, down from 3.3% in the year to March, according to the Office for National Statistics (ONS).
However, analysts expect inflation to rise and reach about 4% by the end of the year, as the Middle East conflict continues to add pressure on global prices.
Caterina Batog, Research & Economics Analyst, at the British Chambers of Commerce, said: “Inflation slowing to 2.8% in April is likely to be a temporary quirk due to the timing of some prices changes rather than a signal on the direction of travel. 
“The key drivers for the slowdown were related to drop in the cost of package holidays and airfares alongside a reduction in energy bills due to the price cap. However, motor fuels saw a substantial rise, and the overall drop is unlikely to be sustained as cost pressures from the Strait of Hormuz blockade continue to feed through.
“BCC data suggest businesses were worried about costs before the Middle East conflict erupted. This showed 73% of businesses were already concerned about labour costs forcing them to raise prices, whereas 52% cited energy bills.
“Today’s fall in inflation is unlikely to encourage the Bank of England to consider further interest rate cuts. The trajectory of the conflict in Iran and energy prices will be key factors in determining the Bank’s next decision.
“Cutting rates risks embedding inflation, but at a time when business confidence is already depressed, keeping them higher for longer could pile more pressure on firms.
“Decisive action is needed by government to show it understands the economic reality that businesses are facing. It must ease the cost burdens firms face including steps to reduce electricity bill levies and reform of business rates.
“Over the longer term, the UK will only build greater resilience by unlocking increased investment, boosting exports, and harnessing the productivity potential of AI.”
More information on the ONS data can be found here.
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