PwC comments on the latest ONS CPI figures - May 2026

Commenting on the Office of National Statistics Consumer Price Index April 2026 data, Adam Deasy, Economist at PwC UK, says:

“On the surface, recent data on the UK economy is sending mixed signals. Q1 GDP growth has surprised to the upside, while yesterday’s jobs data showed a labour market that had further lost steam. Inflation for April 2026 eased more than expected, to 2.8%, but beneath the headline, price pressures are building.

“April always marks the great annual inflation reset, with everything from utilities to broadband contracts repriced at the start of the financial year. This year’s resets were smaller than the increases seen in April 2025, helping pull headline inflation down. Much of the drop was driven by lower household energy bills, reflecting an Ofgem price cap set using wholesale prices from before the conflict in the Middle East.

“The Bank of England will be trying to pick out the signal from the noise. On the one hand, CPI inflation is still almost three-quarters of a percentage point above where they expected it to be back in February. And energy price pressures from the conflict in the Middle East are only beginning to feed through into prices, risking eventually undoing the energy price cap falls that have driven today’s reading. On the other hand, with the labour market weakening, the risk of a wage-price spiral looks lower than feared.

“That leaves the Bank of England facing an awkward balancing act. Monetary policy works with long lags to the real economy; wait too long for a cleaner read on the data, and it risks missing its window of influence. Move too early, and it risks tightening into a weakening economy.”

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