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Wolf in sheep's clothing

ended 20. May 2026

Inflation fell to 2.8% in April, more than expected, due to the lower energy price cap, which counteracted (and then some) the impact of rising fuel prices triggered by events in the Middle East.

The Consumer Prices Index (CPI) rose by 2.8% in the 12 months to April 2026, down from 3.3% in the 12 months to March. On a monthly basis, CPI rose by 0.7% in April 2026, compared with a rise of 1.2% in April 2025.

Grant Fitzner, Chief Economist, ONS, said: "There was a notable fall in annual inflation led by lower electricity and gas prices. This was due to the Government's energy bill support package reducing variable and fixed tariffs, along with lower global wholesale energy prices before the conflict in the Middle East, which fed through to the reduction in the Ofgem cap.

“Smaller rises in water and sewage bills and Vehicle Excise Duty than seen last year also helped pull the rate down. Food prices, particularly for chocolate and meat products, and the price of package holidays drove inflation down further. These were only partially offset by a further increase in petrol and diesel prices, and an uptick in the cost of clothing and footwear. The annual cost of both raw materials and goods leaving factories continued to rise, driven again by higher crude oil and petrol prices.”

  • Could this data be a wolf in sheep's clothing for borrowers, who may believe cheaper rates will be coming and hold out - and then be caught out by rising rates if inflation, as expected, jacks up more sharply than expected over the summer?
  • What does this inflation data mean for savers?

Thoughts, and any other insights relating to savers and borrowers ONLY, ASAP please.

8 responses from the Newspage community

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Rob Mansfield
Independent Financial Advisor at Rootes Wealth Management
Falling inflation sounds positive but prices often lag world events. With sustained conflict in the Middle East, prices are more likely to rise and so this could be a mirage in the desert on bumpy road that is inflation.
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Riz Malik
Independent Financial Adviser at R3 Wealth
If I stood on the weighing scale and this week I lost a pound is that time to celebrate? It isn’t and borrowers and savers shouldn’t rejoice by this inflation print in isolation. Borrowers should try and predict the future and that tomorrow will be better than today. Conversely, saver, especially those in cash, are still having their purchasing power eroded by inflation.
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Philly Ponniah
Chartered Wealth Manager and Financial Coach at Philly Financial
This drop in inflation will feel like welcome relief for borrowers, but I’d be careful about treating it as a true turning point. Much of the fall came from temporary energy effects and we still haven’t fully seen the impact of higher oil prices and Middle East tensions feed through into the wider economy. If inflation starts climbing again over the summer, expectations around future rate cuts could change very quickly. For borrowers, that creates a real risk. Some people may delay fixing their mortgage or refinancing because they expect cheaper deals ahead, only to find rates move higher again if inflation stays stubborn. Waiting for the “perfect” rate can sometimes cost more than securing certainty. For savers, lower inflation is positive because cash savings are no longer losing value as quickly, but it’s still important to review rates regularly rather than assuming today’s returns will last.
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Shaun Sturgess
Director at Sturgess Mortgage Solutions
This data could be a wolf in sheep's clothing for borrowers. There is a chance that borrowers will see the headline figure showing inflation is falling and believe that rates could soon be coming down. The reality is that this data is hiding the full impact of the fuel crisis caused by events in the Middle East and that inflation could rise sharply over the summer, especially if the conflict intensifies. That could send rates higher rather than, as this data may make people think, lower.
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Justin Moy
Managing Director at EHF Mortgages
Borrowers need to understand how this anomaly in the inflation rate has occurred, and that the full effects of the Middle East conflict don't yet show in these numbers. The markets and lenders are already braced for what the next few months will look like, and as mortgage rates are priced on future costs, significant rate cuts are definitely not on the horizon.
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Eamonn Prendergast
Chartered Financial Adviser at Palantir Financial Planning Ltd
A fall in inflation to 2.8% is encouraging, but it’s important to focus on the longer-term trend rather than a single data point.”

“Inflation is the silent erosion of wealth — and even at these levels, it continues to reduce purchasing power over time. Many people focus on nominal returns, especially on cash, but the real return after inflation is what truly matters.

If your savings are earning 3–4% but inflation is close behind, the real gain is minimal. Over time, that can significantly impact long-term financial plans. The key is not reacting to one month’s figure, but ensuring your strategy is built to protect and grow wealth in real terms.”
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Hannah Vandervennin
Director - Mortgage Adviser at The Mortgage Consultancy
The wolf isn't the data. It's what borrowers do with it.
Today's number is welcome, but a chunk of the fall is the energy support package and base effects. Both temporary. Oil is going the wrong way. One month of data is one month of data.
And every month it's the same conversation. The next event, the next number, the next meeting will move the market in a direction nobody saw coming. We've watched this cycle for years now.
The cost of waiting for the perfect moment isn't a slightly worse deal. It's the deal you didn't do. The property you didn't buy. The remortgage you kept putting off until your fix ran out and you rolled onto your lender's standard variable rate by default.
Look at your actual situation. Make a decision. Move forward.
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Matthew Fleming-Duffy
Founder at Harbour Home Finance Ltd
Most homeowners will welcome this inflation news, particularly after the uncertainty of the past couple of years, and it does increase hopes that borrowing costs may ease further over time. However, people making later life lending decisions - whether that’s mortgages in retirement or a lifetime mortgage - are often making long-term financial and lifestyle choices, not short-term rate bets. Trying to hold off for the perfect rate can sometimes backfire, especially when lenders can reprice very quickly if inflation expectations change again. For many older borrowers, confidence and certainty can ultimately prove more valuable than trying to squeeze out a marginally lower rate in an unpredictable market.