In a rare moment of good news that feels like a trap, UK inflation fell to 2.8% in April, down from 3.3% in March, thanks largely to lower energy bills and a government support package that briefly pretended the world wasn't on fire. The Office for National Statistics (ONS) credited the drop to the government's energy bill support and lower wholesale energy prices before the Middle East conflict kicked off.

But don't get too comfortable. Analysts expect inflation to climb back up to about 4% by the end of the year, because the Iran war is doing what wars do: making everything more expensive. The average price of petrol hit 156.8p per litre in April, then rose further to 158.52p by mid-May, according to the RAC. Diesel drinkers got it worse, with prices jumping over 30p to 190p per litre.

Yael Selfin, chief economist at KPMG, called the 2.8% figure "likely as low as it gets for some time" and predicted inflation would "trend higher through much of 2026, heading towards 4% by the end of the year." So, basically, enjoy this brief reprieve while it lasts.

Chancellor Rachel Reeves, sensing the storm clouds, announced further cost of living support, reminding everyone that last year's Budget had "kept inflation down as we deal with global instability." She boasted of taking £117 off energy bills, freezing rail fares, and lifting the two-child limit, with more support to come. Shadow Chancellor Mel Stride countered that prices are "still rising far too fast" and Labour left the economy "weak and exposed to the impacts of the Iran war."

Lindsay James, investment strategist at Quilter, noted the 7% fall in the energy price cap was a positive but "short lived," while ONS chief economist Grant Fitzner pointed out that raw material and factory-gate prices are still climbing, with producer input prices up 7.7% in the year to April. Food inflation slowed slightly to 3%, but the Food and Drink Federation warned it could hit 10% by year-end.

Ian Cheetham, managing director of Set Produce, summed it up: "It is inevitable that food prices will go up." He said his business can absorb some costs, but with fuel prices rising and transportation being a big part of the operation, "it can be hard to absorb it all."

The Bank of England, tasked with keeping inflation at 2%, typically raises interest rates to cool spending. But since much of the current inflation is imported via higher oil prices from the Iran war, rate hikes may be about as effective as a paper umbrella. KPMG's Selfin doesn't expect a rate rise next month, saying the committee will likely wait for clearer evidence of domestic inflation picking up.

In other words: inflation took a nap, but the Iran war is shaking it awake.