Fall in Ofgem price cap brings overall inflation costs down
AN easing in the energy price cap has helped to bring down overall inflation numbers, according to the latest data from the Office for National Statistics (ONS).
Covering the 12 months to the end of April 2026, the overall consumer price index figure including housing costs (CPIH) stood at 3%, down from March’s figure of 3.4%.
The reduction in the 12-month CPIH figure has been put down to a fall in the prices of electricity, says the ONS, where prices fell by 8.4% by the end of April – compared to the same time period in 2025 when they rose by 2.9%.
This fall in prices has come from changes to the Office of Gas and Electricity Markets (Ofgem) energy price cap. Ofgem estimated that for an average household paying by direct debit for dual fuel, this would equate to an annual bill of £1,641, which is a fall of £117.
Ofgem made the decision to reduce the energy price cap based of an assessment period that ran between 15 November to 13 February, which was before the outbreak of the US-Israeli conflict in Iran.
The price cap also fell following the implementation of the UK Government’s April energy bill announcement, which stated it would take an average of £150 off the costs of energy bills.
There was more good news to be found across the food and non-alcoholic beverage category, which also saw a month-to-month decline. According to the ONS, food and non-alcoholic beverages prices rose by 3% during the 12 months to the end of April, down from the 3.7% figure that was seen in March.
This has come from a downward effect across five of the 11 food and non-alc beverages groups consisting of: meat, down 0.03%; sugar, jam, honey, syrups, chocolate and confectionery, down 0.03%; oils and fats, down 0.01%; coffee, tea and cocoa, down 0.01%; and mineral waters, soft drinks and juices, down by 0.01%.
Harvir Dhillon, economist at the British Retail Consortium, said: “Shoppers will breathe a sigh of relief as both headline and food inflation eased this month. Despite the ongoing cost pressures resulting from the Iran conflict, intense competition across the retail sector has successfully helped to stem inflation in the short-term.
“Retailers are already battling a wave of additional costs, from rising utilities to the National Living Wage and Employer NICs, meaning they cannot absorb these pressures indefinitely. To mitigate these pressures and help bring down prices for consumers, the Government must pursue credible and pragmatic measures that reduce costs for businesses.”
Despite the good news to be found elsewhere, transport costs still continued to show a bleak picture at the pumps.
The average price of petrol rose by 16.6 pence per litre (ppl) between March and the end of April 2026, compared to the 3ppl increase that was seen in 2025. This means that the average price of petrol stood at 156.8ppl in April, marking the highest price seen since November 2022 when it stood at 163.2ppl due to the war in Ukraine.
Similarly, diesel prices rose by 31.3ppl in April, compared with the 3.1ppl decline that was seen during the same time period in 2025. The average price stood at 190.0ppl in April 2026, the highest figure recorded since July 2022 when it was 197.9ppl.
James Walton, chief economist at IGD, said: “Contrary to what might be expected given the wider geopolitical landscape, food inflation was 3.0% in April, compared to 3.7% the previous month but this remains above long-term averages.
“This is likely due to a lag effect as food supply chains do not adjust instantly to global events and energy, labour and input costs can take months to filter through to shelf price.
“However, there are signs that the conflict in the Middle East is beginning to have an effect in the supply chain, as farmers are having to contend with higher diesel prices now and the possibility of raised fertiliser prices next season.
“With this in mind, one of our most recent forecast scenarios put food inflation between 4.3-5.3% as an average over 2026.”
