UK consumer prices rose 9.4% year-on-year in June, adding to household pressure as inflation continued at the fastest pace in 40 years.
The biggest reason for the surge in inflation in June was rising food and automotive fuel prices, up from 9.1% last month. National Bureau of Statistics Said on Wednesday. Motor fuel prices have risen by more than 40% over the past year, with gasoline and diesel prices hitting record highs. Food and beverage prices in June rose nearly 10% year-on-year, the largest increase since 2009, with milk, cheese and egg prices rising significantly over the past month. Household energy prices also continue to be a major cause of rising inflation.
Inflation has been at its highest level in 40 years, and rising wages are far behind prices, causing serious pain for households. Inflation-adjusted pay, excluding bonuses, fell 2.8% year-on-year from March to May, according to the Statistics Bureau. This is the sharpest drop in so-called real wages on record.
Since Russia’s invasion of Ukraine, prices of energy, commodities and food have skyrocketed, exacerbating inflation around the world. But in the UK, this clashes with tight labor markets, encouraging employers to offer higher wages and raise prices for goods and services. For policy makers, it balances raising interest rates to tackle inflation, which is well above the Bank of England’s target, and not exacerbating the cost of living crisis by plunging the economy into recession. Is difficult.
“Russia’s shock is now somehow the number one cause of inflation in the UK,” said Andrew Bailey, Governor of the Bank of England. Said in a speech on Tuesday.. “War comes at an economic cost and we all have to be aware of it, but banks do not distract us from setting monetary policy to bring inflation back to the 2% target. . “
Bailey said policymakers would discuss whether to raise interest rates by 0.5% at the bank’s next meeting in August. This will be twice as large as recent interest rate hikes.
Some analysts have pointed out that core inflation, which removes more volatile food and energy prices, may have peaked. This could ease the pressure on central banks to aggressively raise interest rates in the dark economic outlook. Core inflation in June fell slightly for the second straight month.
The data also showed that prices charged to restaurants and accommodations increased by 8.6% over the year from 7.6% last month to June. Inflation rates on clothing prices fell slightly at the beginning of the summer sale season, but were lower than normal. Used car prices have fallen for the fifth straight month. This is a sign that some of last year’s most demanding purchases have eased supply problems.
