Published by Global Banking & Finance Review®
Posted on June 5, 2025
3 min readLast updated: January 23, 2026
The UK's April inflation data was overstated by 0.1% due to a car tax data error, affecting financial markets and causing concern.
By David Milliken and Muvija M
LONDON (Reuters) -Britain's Office for National Statistics said on Thursday that April's consumer price inflation reading of 3.5% had been overstated by 0.1 percentage points due to an error in car tax data provided by the government.
The error also affected the retail prices index - used to calculate interest payments on Britain's 650 billion pounds ($882 billion) of index-linked government bonds - and CPIH, the ONS' preferred measure which includes more housing costs.
The ONS said the April inflation statistics published on May 21 would not be formally amended, in line with its policy of not revising inflation data, but that it would use correctly weighted figures for May data due on June 18.
The British statistical agency was already facing criticism over unreliable unemployment and producer prices data, and the government in April launched an investigation into the problems.
Official inflation data is used to set prices for a wide range of financial assets, and the ONS' announcement caused widespread disquiet in markets.
"A lot of clients have lost a lot of money," said Deutsche Bank's chief UK economist Sanjay Raja who had forecast that April's CPI would rise to 3.4% - a prediction which would have been correct had it not been for the error.
A Reuters poll showed the median forecast among economists had been for consumer price inflation to rise to 3.3%.
"There's a lot of frustration. You had the entire City basically focused on the UK correcting CPI and RPI for an hour or two this morning," Raja said.
The real yield on the index-linked gilt maturing in March 2026 - whose coupon payments are tied to RPI - was up 5 basis points from Wednesday's close and its break-even inflation rate was down 7 bps, according to LSEG data at 1114 GMT. Longer-dated index-linked gilts were less affected.
The incorrect data did not affect Bank of England interest rate decisions as the April data was released after the BoE's May 9 rate cut. May inflation data will be released the day before the next BoE rate announcement.
The ONS said the source of the problem was incorrect data it received from Britain's transport department which overstated the number of vehicles subject to vehicle excise duty in the first year of registration. Internal processes for checking third-party data were being reviewed, it added.
"The ONS apologises for any inconvenience caused," it said.
($1 = 0.7368 pounds)
(Additional reporting by Paul Sandle; editing by Sarah Young, Kate Holton, Alexandra Hudson)
The Office for National Statistics announced that April's consumer price inflation reading of 3.5% had been overstated by 0.1 percentage points due to an error in data collection.
The announcement caused widespread disquiet in markets, with many clients reportedly losing money as a result of the incorrect inflation figures.
The ONS stated that the April inflation statistics published on May 21 would not be formally amended, adhering to its policy of not revising inflation data.
The source of the problem was incorrect data received from Britain's transport department, which overstated the number of vehicles subject to vehicle excise duty.
No, the incorrect data did not affect the Bank of England's interest rate decisions as the April data was released after the BoE's May 9 rate cut.
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