UK inflation has dropped to 2.3% for April, nearing the Bank of England’s target of 2%, according to the latest figures released by the Office for National Statistics (ONS).

The Consumer Prices Index (CPI) had fallen to 3.2% in March compared with the previous year, and forecasters had predicted a further decline to around 2.1% for April. The actual figure of 2.3% increases pressure on the Bank of England to cut interest rates from their 16-year high of 5.25%.

Policymakers at the central bank have increased interest rates over the past two years to tackle inflation, aiming to bring it down to below 2% after it peaked at 11.1% in 2022.

The fall in inflation comes just days after Ben Broadbent, deputy governor of the BoE, suggested that UK interest rates could be cut as soon as this summer. In a speech on Monday morning, he said it is “possible” borrowing costs will decrease this summer if the economy evolves as expected.

Broadbent noted that the Bank’s nine-member Monetary Policy Committee (MPC), which votes on potential interest rate changes, must assess how wage and services inflation are developing. He added, “Whatever the priors of its individual members, the MPC will continue to learn from the incoming data and, if things continue to evolve with its forecasts – forecasts that suggest policy will have to become less restrictive at some point – then it’s possible the bank rate could be cut sometime over the summer.”

Earlier this month, Broadbent was among those who voted to keep interest rates at 5.25%, with the MPC voting 7-2 in favour of no change.

Financial markets have priced in a reduction in interest rates by August.

Pantheon Economics had predicted inflation would reach 2%, while Capital Economics expected it could dip even lower to 1.9%. The Bank of England’s own forecast was 2.1%.