UK inflation hits 9.1% as food prices jump
Inflation in the UK hit another 40-year high in May, reaching 9.1 percent, the highest level since 1982.
Fueled by higher food prices last month, the increase was in line with economists’ expectations who suggest inflation will pick up in the coming months and reach double digits by the fall.
The Bank of England expects inflation to exceed 11 percent in October, significantly higher than other peers in the G7.
The rise in inflation will increase the cost of living on households, increase the demand for wage increases to offset higher prices and make it more difficult to resolve labor disputes, such as those involving the railways.
Price increases are broadly based on goods and services. Food prices rose 1.5 percent in the month alone, with bread, grains and meat rising the fastest.
The Office for National Statistics said road fuel prices were 32.8 percent higher in May than a year earlier, the largest annual price increase in the category since detailed indexes were first compiled in 1989.
Grant Fitzner, ONS chief economist, added that there is still more inflation in the pipeline between factories in the UK, a sign that price pressures are still mounting.
“The price of goods leaving factories rose at the fastest rate in 45 years, driven by widespread food price increases, while the cost of raw materials rose at the fastest rate on record,” he said.
In a statement, Chancellor Rishi Sunak said: “We are using all the tools at our disposal to lower inflation and fight rising prices – we can build a stronger economy through independent monetary policy, responsible fiscal policies that reduce inflationary pressures.” and by boosting our productivity and growth in the long term.”