Wednesday, August 10, 2022

UK inflation rises to 40-year high of 9.4%

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Inflation has soared to a new 40-year high, hitting 9.4 percent last month amid the cost-of-living crisis.

According to the Office for National Statistics, rising food and fuel prices were largely the reason for the rise.

It said CPI inflation rose to 9.4 percent in the 12 months to June, up from 9.1 percent in May — also a 40-year high at the time.

That record has been broken for several months in a row as UK households struggle during the cost of living crisis.

“Annual inflation has risen again to its highest level in over 40 years,” Grant Fitzner, chief economist at the ONS, said on Wednesday.

“The increase was driven by rising fuel and food prices, only slightly offset by falling used car prices.”

The figures came the day after the ONS announced that UK workers had seen regular real wages fall by the largest rate on record, and unions said they were preparing to strike over offers of pay rises for below-inflation public sector workers prepare.

Anna Leach of the Confederation of British Industry (CBI) said inflation is “likely to remain high for the remainder of the year” and weighs “strongly” on tight household incomes.

This is because the labor market is “still tight”, global pressure on prices is strong and another hike in the energy price cap is imminent, the deputy chief economist said.

Rachel Reeves, the Shadow Chancellor, said: “Rising inflation may be wrecking family finances, but the spiral of low wages faced by so many in Britain is not new. It is the result of a decade of Tory mismanagement of our economy, which means living standards and real wages have not grown.”

Chancellor Nadhim Zahawi said: “Countries around the world are fighting higher prices and I know how difficult this is for people here in the UK, so we are working with the Bank of England to try to curb inflation.

“We have provided aid for households worth 37 billion euros.

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