Driven by higher food prices last month, the 9 per cent rise in interest rates in April was in line with economists’ expectations that inflation would reach double-digit levels by the autumn. The Bank of England expects inflation to exceed 11% in October, significantly higher than other similar G7 countries. Rising inflation will increase the cost of living for households, intensify demands for wage increases to offset higher prices and make it more difficult to resolve industrial disputes, such as this week’s rail strike. Prices have risen sharply in a wide range of categories. For a quarter of all sub-data measured by the National Statistics Office, prices were 10 per cent higher than last May and for half of the categories measured, they were up 7 per cent or more. The biggest contribution to inflation came from food prices, which rose 1.5 percent in May, with bread, cereals and meat rising faster. The National Statistics Office said road fuel prices were 32.8 per cent higher in May than last year, the biggest annual jump in prices since detailed indicators were first compiled in 1989. Next month, inflation is likely to rise sharply again, the Resolution Foundation said, because it will take into account the recent rise in fuel prices for pumps. In May, the average price of a liter of gasoline was recorded at 1.66 pounds and has since risen by about 20 p.m. per liter. Yael Selfin, chief UK economist at KPMG, said “there are no signs of a slowdown in inflation yet” and that while the biggest increases were in energy and road fuel, “price increases have spread widely throughout the economy. ». Paul Dales, chief UK economist at Capital Economics, said the inflation pattern justified further interest rate hikes, but not a half-point increase at the next Bank of England meeting in August. It is not clear in this announcement that there are indications of “more persistent inflationary pressures” that the Bank said last week that would push it to “act vigorously”. However, a worrying sign shown by Grant Fitzner, chief economist at ONS, was that price pressures continued to weaken factories across the UK.

“The price of goods leaving factories has risen at the fastest pace in 45 years due to widespread increases in food prices, while the cost of raw materials has skyrocketed at the fastest rate ever recorded,” he said. In a statement, Chancellor Rishi Sunak said: “We are using all the tools at our disposal to reduce inflation and fight rising prices – we can build a stronger economy through an independent monetary policy, a responsible fiscal policy that does not increase inflation. pressures and boosting our long-term productivity and growth ”. In the latest data, the retail price index, used to calculate the increase in indexed bonds, rose to 11.7% in May from 11.1% in April, marking the highest measure for the measure since October 1981.