Inflation highest in 30 months at 4.5 per cent

Easter air fare hike drove up inflation in April.

Inflation rose to 4.5 per cent in April, up from 4 per cent in March.

The last time CPI annual inflation was higher was September 2008 - two and a half years ago - when it stood at 5.2 per cent.

The sharp jump has been blamed on this year's late Easter, whereby the Office for National Statistics (ONS) picked up the raised travel costs from over the holiday. Vicky Redwood of Capital Economics said: "The figures aren't quite as bad as they look. The biggest upward effect came from transport prices - which just reflected Easter timing effects."

Easter this year also fell during the school holidays, a spell of particularly warm weather, and around other Bank holidays. All these factors contributed to more people going on family holidays than usual during the final week of April.

Air fares increased during the month by a record 29 per cent, compared to a 1 per cent drop in the same period last year. Prices of sea transport, such as ferry travel, rose by 22 per cent. Travel services on the whole rose by 5.2 per cent between March and April.

In comparison, the Retail Price Index, with its broader scope and smaller weighting on air fares and other transport costs, fell slightly during April from 5.3 to 5.2 per cent.

Another factor for the rise in inflation was a record hike in alcohol and tobacco duties. On the other hand, petrol and diesel prices rose by less than in the previous year due to the Budget cut of 1p from petrol duties.

Late Easters in 2003 and 2006 accounted for risen air fares as registered by the ONS, but falls in May which helped to dampen inflationary pressures. Barclays Capital economist Chris Crowe corroborated such an expectation for this year: "Our initial impression is that the upside surprise in today's numbers is likely to be largely unwound in May."

Last week at an inflation report press conference, Governor of the Bank of England Mervyn King warned that inflation could reach as high as 5 per cent later in the year.