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UK inflation hits new 40-year high of 9.1%

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CPI inflation rose by 9.1% in the 12 months to May, up from 9.0% in April to a new 40-year high, according to the latest ONS data. On a monthly basis, CPI rose by 0.7% in May, compared with a rise of 0.6% in May 2021. CPIH inflation, which includes owner occupiers' housing costs, saw an annual rise of 7.9%, up from 7.8% in April. Increased prices for food, transport, and electricity, gas and other fuels, were the largest contributors to rising inflation in May. The Bank of England is facing a tough challenge to balance inflationary pressures and the need for economic growth. Last week’s quarter-point interest rate rise suggests it’s pursuing a more cautious approach than many other central banks. Policymakers are clearly conscious of the risks of an entrenched wage-price spiral and have pledged to “act forcefully” if required. This raises the prospect of bigger interest rate rises on the horizon."

Posted by MMB Finance Swindon on 22 June 2022