UK inflation jumped by more than expected last month to 3.5% after dramatic increases in employers’ national insurance contributions, national minimum wage, water bills, energy costs and council tax, official figures show.

A rise in employers’ national insurance contributions and a boost to the national minimum wage also put pressure on companies to raise prices in April by more than City analysts had forecast.

The rise in the consumer prices index recorded by the Office for National Statistics (ONS) came after a decline in the rate over the first months of the year to 2.6% in March.

The Bank of England is now likely to rebuff calls for faster and deeper interest rate cuts after the growth in prices proved to be stronger than financial markets expected.

A spokesperson for the ONS said:

“Significant increases in household bills caused inflation to climb steeply. Gas and electricity bills rose this month compared with sharp falls at the same time last year due to changes to the Ofgem energy price cap.”

They added that water bills also rose strongly this year as did vehicle excise duty, “which all pushed the headline rate up to its highest level since the beginning of last year”.

April’s rise was dampened by falling oil prices, which brought down the cost of petrol and diesel while heavy discounting of children’s clothes and women’s footwear restricted the rise in clothing costs