Britain’s inflation rate hit a new 40-year high of 9.1 per cent in the 12 months to May, figures showed Wednesday, as Russia’s war in Ukraine drove food and fuel prices ever higher.
The Office for National Statistics said consumer price inflation rose slightly from nine per cent in April, itself the highest level since 1982.
Chief economist Grant Fitzner said “continued steep food price rises and record-high petrol prices were offset by clothing costs rising by less than this time last year, and a drop in often fluctuating computer games prices.”
The increase was in line with analysts’ expectations and signals no quick end to the cost-of-living squeeze facing millions in Britain. The Bank of England says inflation could hit 11 per cent in October when a cap on domestic energy bills is raised.
Jack Leslie, senior economist at economic inequality think-tank the Resolution Foundation, said inflation would likely climb further in June because of “the big spike in petrol prices over the past month.”
“With the economic outlook so unclear, no one knows how high inflation could go, and how long it will continue for — making fiscal and monetary policy judgments particularly tough,” he said.
Inflation is soaring worldwide: the U.S. reported a rate of 8.6 per cent in May, and the 19 countries that use the euro recorded 8.1 per cent inflation the same month.
Canada’s May report will be released later Wednesday.
Opposition takes aim at Conservative government
Britain’s economy initially rebounded strongly from the COVID-19 pandemic but a combination of labour shortages, supply chain disruption, inflation and post-Brexit trade problems has complicated matters.
Millions of people in Britain, like those across Europe, are seeing their cost of living soar, in part driven by Russia’s war in Ukraine that is squeezing supplies of energy and food staples such as wheat.
The pressure is driving British workers to seek substantial pay increases, a move the Conservative government argues could spark a wage-price spiral, driving inflation even higher.
NEW: Inflation up at 9.1% today.<br><br>Inflation is pushing family finances to the brink – but the low wage spiral many face isn’t new.<br><br>It’s a result of a decade of Tory mismanagement of our economy.<br><br>Labour will build the high wage, high growth, stable inflation economy we deserve.
Tens of thousands of railway workers are walking off the job for three days this week in the country’s biggest transit strike for three decades, and a potential precursor to a summer of labour discontent.
The Labour Party was quick to seize on the numbers, with its finance critic Rachel Reeves characterizing it as “a result of a decade of Tory mismanagement of our economy.”