Inflation in the United Kingdom reached a new 40-year high in May, reaching 9.1%, its highest level since 1982.
Fueled by higher food prices last month, the 9 percent rise in April was in line with economists’ expectations that inflation would reach double digits by autumn.
The Bank of England expects inflation to exceed 11% in October, significantly higher than in other similar G7 countries.
Rising inflation will increase pressure on the cost of living on households, increase demands for higher wages to offset higher prices and make it harder to resolve industrial disputes such as the railway strike this week.
Prices have risen rapidly in a wide range of categories. For a quarter of all individual items measured by the National Statistical Office, prices were 10 percent higher than last May, and for half of the measured categories they rose by 7 percent or more.
The biggest contributors to rising inflation were food prices, which rose 1.5% in May, with bread, cereals and meat rising the fastest.
The National Bureau of Statistics reported that road fuel prices were 32.8% higher in May than a year earlier, the biggest annual jump in prices in the category since detailed indices were compiled for for the first time in 1989
The inflation rate is likely to rise sharply again next month, the Resolution Foundation said, because it will take into account the recent rise in fuel prices at the pumps. In May, the average price per liter of petrol was £ 1.66 and has risen by about 20 pence per liter since then.
Yael Selfin, the UK’s chief economist at KPMG, said that “there are still no signs of weakening inflation” and that although the biggest increase is in energy and road fuels, “rising prices are spreading across the economy”.
Paul Dales, Britain’s chief economist at Capital Economics, said the inflation pattern justified a further rise in interest rates, but not a half-point rise at the next Bank of England meeting in August. “It is not clear in this announcement that there are signs of ‘more sustained inflationary pressures’, which the Bank said would push it to” act violently “last week.
However, one worrying sign pointed out by Grant Fitzner, chief economist at ONS, is that price pressures are still breaking down in UK factories.
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“The price of goods leaving factories rose at the fastest pace in 45 years, driven by widespread food prices, while the price of raw materials jumped at the fastest rate in history,” he said.
In a statement, Chancellor Rishi Sunak said: “We are using all the tools at our disposal to reduce inflation and fight rising prices – we can build a stronger economy through independent monetary policy, responsible fiscal policy that does not contribute to inflation. pressure and by increasing our long-term productivity and growth. ”
In recent data, the retail price index used to calculate the increase in index-linked bonds rose to 11.7% in May from 11.1% in April, the highest reporting measure since October 1981.
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