Get Premium Data for Cyber Monday: Up to 55% Off InvestingProCLAIM SALE

U.K. Inflation Hits Fresh 40-Year High in May

Published 06/22/2022, 02:29 AM
Updated 06/22/2022, 03:39 AM
© Reuters.

By Scott Kanowsky

Investing.com -- Inflation in Britain rose to a new 40-year high of 9.1% in May, according to the Office for National Statistics, fuelled by a jump in costs for food and energy.

The increase in the U.K.'s Consumer Price Index was in line with estimates, and adds pressure on the Bank of England as it looks to stem a cost of living crisis in the country.

On a month-to-month basis, prices moved higher by 0.7%.

The ONS said the largest contributor to inflation in May came from soaring costs for foods, particularly bread, cereal, and meat. Rising prices for electricity, gas, and other fuels also put upward pressure on inflation.

Meanwhile, the 12-month rate for motor fuel prices was 32.8% - the largest jump since numbers in this category were first compiled in 1989.

Concerns have mounted recently that Britain may be facing these higher prices throughout the rest of the year, with the BoE predicting that inflation could rise to more than 11% in October. Last week, the central bank increased its benchmark interest rate by 25 basis points to combat "robust cost and price pressures," adding that it will "act forcefully" in the future in response to soaring inflation.

"Overall still a discouraging report but I am not sure it tells us a lot about [the Bank of England's Monetary Policy Committee] action ahead of their August meeting," said Simon French, chief economist at Panmure Gordon, in a tweet. "Having set threshold for faster pace of tightening (+50bp) should inflation picture deteriorate, I would say [...] last week's data has been finely balanced."

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.