High inflation hinders UK cost-of-living fight
Britain's annual inflation rate unexpectedly remained at 8.7 percent in May, official data showed Wednesday, piling pressure on the Bank of England and government to act over a cost-of-living crisis.
Markets had forecast a drop from April's level, while the BoE was already widely expected to raise interest rates again Thursday to combat an inflation rate which is the highest among G7 nations.
The latest data is a blow also for Prime Minister Rishi Sunak, who has made cutting inflation a priority for his Conservative government heading into a general election next year.
Britain has endured months of strikes by workers demanding higher wages to help with the cost-of-living crisis.
"We know how much high inflation hurts families and businesses across the country," finance minister Jeremy Hunt said following the latest consumer prices index data.
UK inflation had been expected to cool to 8.4 percent last month while core inflation, which strips out food and energy costs, unexpectedly jumped to 7.1 percent in May, said the Office for National Statistics.
"Core inflation rose again, to its highest rate in over 30 years," noted Sarah Coles, head of personal finance at Hargreaves Lansdown.
"Lower energy costs will eventually feed into prices across the board, and we should see the pain at the supermarket subside a little in the coming months.
"However, in an awful lot of cases this isn't going to bring prices down, they'll just get more expensive more slowly," she added.
/- Higher rates -/Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said the latest figures "warn that inflationary pressures in the UK are not under control and call for further rate hikes which will further squeeze the British households".
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