UK inflation hits new 40-year high of 9.4%; rising food and fuel costs add to woes 

The Consumer Prices Index (CPI) jumped to 9.4 per cent last month from 9.1 per cent in May, the Office for National Statistics said in a statement.

Published: 20th July 2022 01:30 PM  |   Last Updated: 20th July 2022 01:35 PM   |  A+A-

Inflation; growth

(Express Illustrations | Amit Bandre)


LONDON: British annual inflation surged to a new 40-year high in June on rising motor fuel and food prices, official data showed Wednesday, adding to a cost-of-living crisis.

The Consumer Prices Index (CPI) jumped to 9.4 per cent last month from 9.1 per cent in May, the Office for National Statistics said in a statement.

Analysts said the data put pressure on the Bank of England to raise interest rates by as much as 50 basis points, or half a percentage point, at its next policy meeting in August.

The central bank expects British inflation to top double figures this year. "In the UK, we saw another eye-popping CPI reading and the pressure is on the BoE to do what it takes before it is too late to control inflation," said Naeem Aslam, chief market analyst at Avatrade.

Inflation has soared to the highest level in decades in many countries, fuelled by the war in Ukraine and the easing of Covid restrictions.

That has forced central banks to raise interest rates, risking the prospect of recession as higher borrowing costs hurt businesses and consumers.

The Bank of England has raised its key interest rate five times since December, lifting it to 1.25 per cent from a record-low 0.1 per cent. The BoE has not increased its rates by more than 0.25 percentage points each time.

However, on Tuesday, BoE governor Andrew Bailey said that "a 50-basis-point increase will be among the choices on the table when we next meet".

Summer of strikes 

Separate data this week showed that soaring UK inflation has caused the value of British wages to fall at a record pace. And Britain is experiencing a summer of strike action as a result of the cost-of-living crisis.

Aircraft refuellers at London's Heathrow airport will strike for three days later this week, while this month sees also telecoms giant BT facing its first staff walkout since 1987.

Railway staff are preparing for further stoppages having last month carried out their biggest strike action in decades. State-employed lawyers are also striking, while teachers and workers for the National Health Service are mulling action.

Britain's retail prices index (RPI) -- which includes mortgage interest payments and is used by unions and employers when negotiating wage increases -- rose to 11.8 per cent in June from 11.7 per cent in May, the statistics office calculated.

"More pain is on the way for household budgets as the high rate of inflation continues to outpace wage growth, bringing down the real value of incomes across the UK," said Yael Selfin, chief economist at KPMG UK.

"We also expect the Bank of England to continue raising the base interest rate, which we now expect to reach 2.0 per cent early next year, to stave off further rounds of inflation rises."


Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on are those of the comment writers alone. They do not represent the views or opinions of or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp