UK borrowing costs surged to levels last reached under Liz Truss’s ill-fated premiership after traders were spooked by unexpectedly strong inflation.
The consumer prices index (CPI) dropped to 8.7pc last month from 10.1pc in March, but the Bank of England had expected a bigger fall to 8.4pc.
Meanwhile, core inflation increased to 6.8pc in April, its highest level since 1992.
Traders now expect interest rates to rise to 5.5pc by the end of the year, up from 4.5pc currently.
Core inflation strips out more volatile elements such as rises in food and drink prices, which stayed near 45-year highs at 19pc.
The data published by the Office for National Statistics (ONS) piles pressure on the Bank of England to raise rates as it signals inflation will remain higher for longer.
It comes a day after the International Monetary Fund warned that the Bank was not finished with taming inflation as it said Britain faced two more years of soaring prices.