UK Inflation Rises at Fastest Rate for 40 Years

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UK Inflation Rises at Fastest Rate for 40 Years
24 Jun 2022
6 min read

News Synopsis

Food prices, particularly for bread, cereal, and meat, are continuing to rise at the fastest rate in 40 years. The rate at which prices rise in the United Kingdom increased to 9.1 percent in the year to May from 9 percent in April, according to the Office for National Statistics (ONS).

Although fuel and energy prices are the primary drivers of inflation, the ONS reported that food costs had pushed it even higher. Workers and unions are pushing for pay increases to keep up with rising prices.

However, the government has warned employers against giving out large pay raises, fearing a 1970s-style "inflationary spiral" in which firms raise wages and then pass the cost on to customers through higher prices.

Inflation is currently at its highest level since March 1982, when it was also 9.1 percent, and the Bank of England has warned that it will reach 11 percent this year. Inflation is defined as the rate at which prices rise. For example, if a bottle of milk costs £1 and increases by 5p from the previous year, milk inflation is 5%.

In a BBC-commissioned poll of over 4,000 people, 82% said their wages should rise to keep up with rising prices of goods and services. Households were hit by an unprecedented £700-per-year increase in energy costs in April, and fuel price increases in June mean that filling an average family car with petrol now costs more than £100.

TWN Special