Inflation soars to fresh 40-year high
UK inflation has surged to a fresh 40-year high as fuel and energy prices rocketed amid the cost-of-living squeeze, according to official figures.
The Office for National Statistics (ONS) said Consumer Prices Index (CPI) inflation rose to 9.4% in June, up from 9.1% in May.
This remains the highest level since February 1982 and heaps yet further cost pain on cash-strapped households and businesses.
Grant Fitzner, Chief Economist at the ONS, said: “Annual inflation again rose to stand at its highest rate for over 40 years. The increase was driven by rising fuel and food prices; these were only slightly offset by falling second-hand car prices.”
Newly appointed Chancellor Nadhim Zahawi and Bank of England Governor Andrew Bailey have both pledged to get inflation under control.
Zahawi said: “Countries around the world are battling higher prices and I know how difficult that is for people right here in the UK, so we are working alongside the Bank of England to bear down on inflation.”
In a speech in London on Tuesday evening, Bailey said a bigger interest rate rise will be one of the options being mooted at the next meeting of the Bank of England’s decision-makers.
He said a 50 basis percentage point rise – which would take rates from 1.25% to 1.75% – is on the table as part of its vow to “act forcefully” if inflation shows signs of becoming embedded in the economy.
The ONS figures also show that the CPIH, which includes owner-occupiers’ housing costs and is the ONS’s preferred measure of inflation, rose by 8.2% in June, up from 7.9% in May.
The Retail Prices Index (RPI) rose from 11.7% in May to 11.8% in June.