Inflation in surprise fall - but pressure on prices remains

The war in Iran has led to millions of households worrying about the cost of living going up - but in a development you might not have expected, inflation actually went down last month.

New figures show that inflation fell to 2.8% in April - down from 3.3% in March.

The bigger than expected drop has been put down partly to the 7% fall in the energy price cap that was introduced last month.

But the pressure on prices hasn’t gone away.

Oil prices remain high as Middle East crisis continues

The US-Israel war in Iran is still ongoing and the Strait of Hormuz - a key shipping route that about a fifth of the world’s oil supply passes through - remains closed.

That's sent oil prices soaring, which in turn is pushing up the price of energy, food and petrol, and disrupting global supply chains.

And even if the US and Israel reach a deal with Iran tomorrow, the economic and infrastructure damage won't be instantly undone.

Average petrol prices are already at their highest point since the start of the war, according to the RAC.

And all expectations are that the energy price cap will go up considerably in July, possibly by more than £200.

Needless to say, we’ll be keeping a close eye on what’s going on in the Middle East and here to let you know what it will mean for you and your money.

What is inflation?

Inflation is a measure of how fast prices are going up.

So if inflation rises, your money doesn’t buy as much as it did before.

But although a fall in inflation is good news for hard-pressed households, it doesn’t actually mean more money in your pocket.

It means prices are still rising, just at a slower rate.

How is inflation measured?

Imagine a shopping basket full of everyday items like bread and milk, along with bigger purchases like cars and televisions.

The Office for National Statistics tracks the price of what’s in that basket every month - and the headline inflation figure shows how much it’s changed.

I’m struggling with soaring costs - what can I do?

If you’re worried about the rising cost of living, there are some practical steps you can take.

Look at your spending

It’s important to know how much money you’ve got coming in and where it’s going.

So take a proper look at your income and expenses, so you can prioritise your spending and identify where savings can be made.

That should give you more certainty that you can cover vital costs when bills arrive.

Check out our guide to how to create a budget to get started, and try out our free budget planner.

Check our regular money saving tips

We’re regularly updating these pages with ideas on how you can cut costs, such as: 

• how to make your money go further
• how to save energy
• how to keep the cost of your food shop down
• 50 ways to cut your fuel costs

You can also find round-ups of standout deals and low-cost recipes that can help you save money in the shops and at home.

See what benefits you can claim 

You might be entitled to claim financial support to help you with your living costs.

Use our benefits calculator to see what you could be eligible for.

Even if you’re in work, you might still be able to get some support.

Get help with your debts

If you’re feeling burdened by debt, contact us for confidential, practical and impartial debt advice.