UK inflation rises to 40-year high of 9.4% as cost of living crisis spirals

Inflation has risen to a new 40-year high, reaching 9.4 per cent last month during the cost of living crisis.

Soaring food and fuel prices were largely behind the increase, according to the Office for National Statistics.

It said Consumer Price Index inflation rose to 9.4 per cent in the 12 months to June, up from 9.1 per cent in May – which was also the highest level in 40 years at the time.

This record has been broken for several months in a row as UK budgets are stretched during the cost of living crisis.

“Annual inflation again rose to stand at its highest rate for over 40 years,” Grant Fitzner, chief economist at the ONS said on Wednesday.

“The increase was driven by rising fuel and food prices, these were only slightly offset by falling second-hand car prices.”

The figures came the day after the ONS revealed British workers had seen regular pay drop in real terms by the largest rate on record and unions said they would prepare for strike action over below-inflation pay rise offers for public sector workers.

Anna Leach from the Confederation of British Industry (CBI) said inflation was “likely to stay high for the rest of the year” and “severely” eat into strained household incomes.

This was because the labour market was “still tight”, global pressures on prices were strong and another energy price cap increase on the cards, its deputy chief economist said.

Rachel Reeves, the shadow chancellor, said: “Rising inflation may be pushing family finances to the brink, but the low wage spiral facing so many in Britain isn’t new. It’s the result of a decade of Tory mismanagement of our economy meaning living standards and real wages have failed to grow.”

Nadhim Zahawi, the chancellor, said: “Countries around the world are battling higher prices and I know how difficult that is for people right here in the UK, so we are working alongside the Bank of England to bear down on inflation.

“We’ve introduced £37bn worth of help for households, including at least £1,200 for 8 million of the most vulnerable families and lifting over 2 million more of the lowest paid out of paying personal tax.”

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