UK inflation slowed to 2.8% in April, according to official figures, as a reduction in the household energy price cap helped soften the sharp rise in fuel costs since the start of the Iran war.

The Office for National Statistics (ONS) said the consumer prices index measure of inflation eased from March’s reading of 3.3%, suggesting the impact of the Iran war has not yet hit UK households as much as feared.

Economists had been expecting inflation to slow to 3%, partly because of the impact of Ofgem’s lower energy price cap, which reduced the typical annual dual-fuel bill in Great Britain to £1,641 from April compared with £1,849 a year earlier.

The slowdown in inflation will be welcome news for the chancellor, Rachel Reeves, after she shifted some green energy costs away from household bills and into general taxation in her November budget to help ensure bills fell from April.

Water bills and vehicle excise duty also increased by less in April this year compared with 2025, when they both rose sharply, while the early Easter affected prices such as air fares in comparison with last year.

However, economists believe the drop in inflation is unlikely to last as petrol and diesel prices have soared since the start of the Middle East conflict, reflecting a jump in the global oil price to more than $110 a barrel as the closure of the critical strait of Hormuz affects energy supplies.

The drop in the inflation rate comes after ONS data released on Tuesday showed wage growth slowed and unemployment rose in March. The figures are likely to reduce the likelihood of the Bank of England raising interest rates at its next meeting on 18 June.

Rate-setters at the Bank have to find a balance between containing inflation and not denting economic activity. The Bank held rates at 3.75% at its meeting last month but said it was prepared to push up the cost of borrowing if inflation continued to rise.

More details soon …