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HomeUncategorizedUK inflation soars to a 40 year high

UK inflation soars to a 40 year high

Published: 22 Jun 2022 14:28 GMT

Consumer price index (CPI) inflation rose by 9.1% this May over the previous twelve months in the United Kingdom, data released Wednesday by the country’s Office for National Statistics show.

While the figure is a slight increase compared to the 9 % recorded this April, it corresponds to the highest year-on-year rise since 1982. This May, the CPI in the UK also exceeded the corresponding index for the US, which reached 8.6%, and also corresponds to the highest year-on-year increase since 1981.

In terms of monthly periodicity, the consumer price index rose by 0.7% this May, a figure similar to the 0.6% recorded in May 2021.

The report notes that the rise was caused by the prices of food and non-alcoholic beverages that grew by 8.7% during the 12 months prior to May, the highest increase recorded since May 2009, and by 1.5% compared to this April.

Meanwhile, motor vehicle fuel prices rose 32.8% in May compared to the previous twelve months.

Even so, inflation in the country is expected to continue to grow. On June 16, the Bank of England raised the interest rate to 1.25% – a 0.25 percentage point increase – and indicated that it expects the CPI to rise to 11% in October. “The committee will be particularly alert to indications of more persistent inflationary pressures and, if necessary, will act firmly in response,” the bank’s Monetary Policy Committee said.

“With such an unclear economic outlook, no one knows how much inflation might rise and when it would last, making fiscal and monetary policy decisions especially difficult,” Jack Leslie, senior economist at the Resolution Foundation think tank, told Reuters.

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