- CPI expected to ease to 3.0% y/y (prev 3.3%)
- Services inflation seen cooling sharply
- Oil shock risks fuelling broader inflation surge
- UK petrol prices jump to highest since 2022
- Data scheduled for 06:00 GMT/ 07:00 CET

By Harry Daniels
LiveSquawk News
@HarryDaniels71

17:00 GMT | 19 May 2026

LONDON – UK price growth is expected to cool temporarily, with reporting anomalies likely to distort the headline consumer price index.

An economists’ poll predicts annual headline inflation slowed three-tenths to 3.0% in April, interrupting the recent uptrend. On the month, CPI is expected to rise 0.9%, after a 0.7% prior increase.

The less volatile core rate is forecast to cool to 2.6% from 3.1% in March.

Economists said the slowdown is largely driven by services disinflation, reflecting administered price base effects and the timing of the Easter holidays.

“Though temporarily comforting, the brunt of the energy price shock will then be felt in Q3, with potential for second-round effects in the latter half of the year,” TD Securities cautioned.

Source: Energy Information Administration

There are several key uncertainties surrounding April CPI, noted Nomura’s George Buckley.

“Whether food prices rise more sharply due to higher energy costs; whether heating oil prices correct after March’s 90% m/m surge; the extent of vehicle excise duty increases following last year’s erroneous spike; the scale of annual phone and broadband price hikes; and whether higher energy costs feed through into holiday and travel prices. Volatility from hotels, catering and recreation components also remains a risk,” he said.

The world is now in its third month of the energy crisis.

Although fighting between the US and Iran has ceased, talks on a permanent ceasefire have stalled. As a result of joint blockades, the Strait of Hormuz -- the main route for transporting oil from the region -- has effectively remained shut for around eight weeks.

Media reports said UK petrol prices have surged to 158.5p per litre, the highest level since December 2022 and above the April peak. Analysts attributed the move to tensions in the Middle East, with the RAC warning that unleaded petrol could soon reach 160p per litre.

The average price of deliverable Brent crude has been around USD 109/bbl since late February. Oil prices surged following the outbreak of the Iran conflict, with spot Brent briefly trading above USD 120/bbl during April.

On factory gate costs, Nomura said, "Further increases in the PMI and CBI measures of upstream prices suggest a stronger rise in core output prices in April, as well as a further increase in energy prices.

The UK’s finance minister, Chancellor Rachel Reeves, is facing growing pressure to do more to help households cope with rising living costs.

“The Chancellor must go much further to help families in her announcement this week — by removing all VAT on fuel for the duration of the crisis and by introducing a new household energy price cap to cut bills for all households by hundreds of pounds,” said Kirsty Blackman, the Scottish National Party’s new economy spokesperson at Westminster.

Members of the Bank of England’s Monetary Policy Committee have also had their say on the effects of high energy prices.

Megan Greene warned fellow rate setters that they cannot assume the inflationary impact of the war in Iran will be temporary. She said central banks must rethink their tendency to “look through” supply shocks and cautioned that repeated energy shocks could have more lasting effects on inflation expectations.

BoE Governor Andrew Bailey struck a more balanced tone, stressing that the Middle East crisis represented a major supply shock. However, he cautioned that officials should avoid a mechanical response to higher inflationary pressures. He stated that further hikes were “not inevitable” when asked about possible MPC responses.