Thanks for joining me. Inflation has fallen to its lowest level in more than a year after a drop in the energy price cap outweighed the oil shock from the Iran war.

The consumer prices index (CPI) fell to 2.8pc in April, according to the Office for National Statistics (ONS), after Ofgem reduced annual household energy bills by £117.

Economists fear the larger than expected fall in inflation is a false dawn before a surge in prices later this year linked to the conflict in the Middle East. Petrol prices on Tuesday hit their highest level since the start of the war, having risen by more than 25p a litre since February.

Inflation accelerated to 3.3pc in March after the outbreak of the war, which has sent oil and gas prices soaring after exports through the Strait of Hormuz were effectively cut off.

However, CPI slowed in April to its lowest level since March last year after the Chancellor took some green levies out of household bills, allowing Ofgem to reduce its price cap. Electricity prices fell by 8.4pc in April, the ONS said.

The Bank of England has forecast that inflation could rise above 6pc in a worst case scenario if there is a long delay in reopening the Strait of Hormuz, where a fifth of global oil and gas exports usually pass.

Cornwall Insight, the energy consultancy, said it expected Ofgem to raise its energy price cap by 13pc from £1,641 to £1,850 a year from July, even as warmer summer weather arrives, because of the energy shock. Here is what you need to know.

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What happened overnight

Asian stocks fell as inflation fears hammered bonds.

The sell-off in global bond markets persisted as investors ramped up bets that the Federal Reserve may need to increase interest rates this year.

The benchmark 10-year Treasury yield hit a 16-month high of 4.69pc overnight, while the 30-year yield climbed to nearly 5.2pc, levels not seen since 2007.

Oil prices remained elevated despite President Donald Trump saying he had postponed planned military action against Iran to allow more time for negotiations, helping Wall Street recover some earlier losses.

In Beijing, less than a week after Trump’s high-profile visit, Chinese leader Xi Jinping held talks with Russian President Vladimir Putin, saying it was imperative to stop the war in the Middle East.

MSCI’s broadest index ⁠of Asia-Pacific shares outside Japan fell 0.7pc, down for a fourth straight day, while Japan’s Nikkei dropped 1.5pc, down for a fifth consecutive session.

South Korea’s Kospi fell 1.7pc. Samsung dropped 1.4pc after its union said it would go ahead with an 18-day strike from Thursday, threatening the global supply of semiconductors.

China’s blue-chip CSI300 index was flat, while Hong Kong’s Hang ​Seng index skidded 0.6pc.

On Tuesday, the American benchmark S&P 500 slipped 0.1pc to 5,963.18 while the tech-heavy Nasdaq Composite fell 0.5pc as investors pulled back from semiconductor stocks ahead of Nvidia results. The Dow Jones Industrial Average rose 0.3pc.