UK inflation has dropped by less than expected, despite falling gas and electricity prices, making it less likely that the Bank of England will lower interest rates at its next meeting in June.

The figures showed that prices for consumer goods rose 2.3% in the year to April, down from 3.2% in March.

It marks the lowest level since July 2021, however it is still 0.3% higher than the Bank’s target figure of 2%, and higher than the 2.1% forecast by City analysts.

Services inflation, which is also a critical indicator for Bank policymakers, dipped slightly from 6% in March to 5.9% in April, coming in ahead of the 5.4% rate that some forecasters had been predicting, according to the data, released by the Office for National Statistics (ONS).

Economists think that the higher-than-expected inflation figures make it less likely that the Bank will cut interest rates from 5.25% in its meeting on 20th June, and more likely the first drop will come in August.

Kate Nicholls, Chief Executive of UKHospitality, said:

“Hospitality has weathered unprecedented costs, including from government policy.

Today’s inflation data continues 18 months of improvement and we are now at a normal level of inflation.

The trend is clear, and the Bank of England can now act with confidence. It’s time for interest rates to come down to support businesses investing in their growth.

We should be ahead of the curve not behind it.”