The rate of UK inflation rose to a fresh 40-year high of 9.4 per cent in June as a sharp rise in petrol prices drove the rate towards double digits for the first time since 1982.
The Office for National Statistics said that with petrol prices rising by 18.1 pence per litre, the largest rise since equivalent records began in 1990, fuel costs outweighed downward forces on inflation from second-hand cars and audiovisual equipment.
The June rate was higher than the 9.3 per cent figure economists had expected, and will add to pressure on the Bank of England for a forceful response. Andrew Bailey, governor of the central bank, said on Tuesday that a 0.5 percentage point increase was “on the table” for its next meeting in just over two weeks’ time.
Yael Selfin, chief UK economist at KPMG, said that “with further energy bill increases due to take effect from October, the peak in inflation is still some way off, and is not expected to return to the 2 per cent target before mid-2024”.
Food prices rose 9.8 per cent in the year to June, the highest rate in this category since 2009. The cost of food increased by 1.2 per cent in the month of June alone. There was a similarly large monthly rise in the price of restaurant meals, with the annual rate increasing to 8.6 per cent.
Chancellor Nadhim Zahawi 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”.