UK inflation hits new high of 9.1% as food and energy price surge persists

[Wakate]

U.K. inflation hit 9.1% year-on-year in May as soaring food and energy prices continue to deepen the country’s cost-of-living crisis. The 9.1% rise in the consumer price index, released Wednesday, was in line with expectations from economists in a Reuters poll and slightly higher than the 9% increase recorded in April.

https://www.cmcmarkets.com/sv-se/nyheter-och-analys/uk-cpi-set-to-increase-again-in-may

Consumer prices rose by 0.7% month-on-month in May, slightly above expectations for a 0.6% rise but well short of the 2.5% monthly increase in April, indicating that inflation is slowing somewhat. The largest upward contributions to the inflation rate came from housing and household services, primarily electricity, gas and other fuels, along with transport (mostly motor fuel and second-hand cars).

The Consumer Prices Index including owner occupiers’ housing costs (CPIH) came in at 7.9% in the 12 months to May, up from 7.8% in April. “Rising prices for food and non-alcoholic beverages, compared with falls a year ago, resulted in the largest upward contribution to the change in both the CPIH and CPI 12-month inflation rates between April and May 2022 (0.17 percentage points for CPIH),” the ONS said in its report.

https://www.gulftoday.ae/news/2022/06/22/uk-inflation-hits-40-year-record-highest-in-g7
The Bank of England last week implemented a fifth consecutive hike to interest rates, though stopped short of the aggressive hikes seen in the U.S. and Switzerland, as it looks to tame inflation without compounding the current economic slowdown.
More than four in five people in the U.K. are worried about rising living costs and their ability to afford basics necessities like food and energy over the coming months, according to a new survey.

[1714763972]

1714763972

[1714763972]

1714763972

[1714763972]

1714763972

[1714763972]

1714763972

[Majestic-milf]

It doesn't come as a shock that the UK's food and energy price has skyrocketed since it's last high recorded in April. With them still dealing with the strain the COVID-19 pandemic put on them, and the demand for consumer goods are high as against the supply, the government will have to look for means to curb this to avoid the inflation rate climbing to a shocking 10%.
 

[kryptqnick]

I've lived in a country with high inflation rate, and I guess it made me pretty much insensitive to changes like this. I've been living in the UK since February, and if the prices got higher within this period of time, I didn't notice. They're very high, but that's because I compare them to a third-world country where I'm from. The 9% inflation, though, doesn't mean that the prices for goods went up by 9%. And you can see from this article that it's actually more like 4%, which, honestly, isn't easy to notice. If your average shop bill was 40 GBP, it would now be 42. Would you notice that?

[Zilon]

Historical records from the Office for National Statistics show May's inflation was the highest since March 1982 — and worse is likely to come which means a fear for a dangling economy. The rise in consumer price index is becoming a big threat to the economic growth of food and energy production in Britain as high risk of meeting higher inflation rate and recession is staring fiercely at the UK Consumer price index.

[bitmover]

It is very interesting to see developed countries having an emergent country problem.
In Brazil 10% inflation is quite normal   

And our solution is to raise interest rates. But I mean, really raise. Our interest rate is now 13.25%!!!

Fed just raised it to 0.75%. That is quite ridiculous to nearly 10% inflation rate in USA.  They expect to get up to 3% this year.

Let's see how it goes by the end of the year. If the inflation is persistent we will see more aggressive raises, which could like lead to a recession...

[Pomogator]

I've lived in a country with high inflation rate, and I guess it made me pretty much insensitive to changes like this. I've been living in the UK since February, and if the prices got higher within this period of time, I didn't notice. They're very high, but that's because I compare them to a third-world country where I'm from. The 9% inflation, though, doesn't mean that the prices for goods went up by 9%. And you can see from this article that it's actually more like 4%, which, honestly, isn't easy to notice. If your average shop bill was 40 GBP, it would now be 42. Would you notice that?

I think the purpose of this article is to show what consequences such a policy of Great Britain and the rest of the NATO bloc in particular has. If you continue to adhere to this position, then everything will only get worse. Of course, now these 2 GBP don’t play any role, but in a year it will already turn into 10 GBP, and maybe more.

[el kaka22]

It is not going to go away. We are in a period where gas prices keep on going high, food goes up just because of that basically. You build a farm out of the cities, someplace where nobody lives, and then you need to use tractors which uses gas to collect those, then you put them on trucks and send them to cities, which causes the food prices go be high.

However, as long as there are no cheap oil, gas whatever prices anywhere then we are going to keep living this high priced world and it will not stop. Right now, the whole world is aware of the situation, and they can't really do anything right now, hence we just need to accept the fact that the world will be like this until all thing settled.

[DrBeer]

What surprises you? Over the past 2+ years, the whole world has been experiencing several powerful crises - first Covid, then the first wave left hard scars on the economies of countries ... Small and small businesses - for the most part and everywhere did not survive the restrictive measures. Which led to unemployment, and the burden on social budgets, already overloaded with pandemics. Then a new wave of Covid. And in 2022, there will also be a new round of terrorist aggression against Ukraine, which launched a chain reaction of sanctions and consequences (unfortunately, sanctions often have a backlash). The result of the conflict was also the disruption of the hydrocarbon market. With gas, decisions are still being delayed, and with oil, an embargo and all side processes, as a result, an increase in logistics costs, which greatly affects everything that surrounds us ... The next couple of years will be very difficult ... Covid will still seem "easy problem"

[Hydrogen]

Loans with 1% interest rates in an environment with 9% inflation would be structured to net profit a loss.

Central banks may be forced to raise rates, to cut loan payment losses as inflation rises.

I think that could be the narrative most are missing.

Its difficult to visualize the effect inflation has on loan markets. Loan payments are depreciating at a faster rate, faster than loaners earn from interest. The market greatly favors those taking out a loan in contrast to those offering loans.

[Desmong]

The rate the price of food is going high is very surprising and the government is not even doing anything about it. Salary earners are getting choked up because of the price of food stuffs are going high but salary does not increase at all. Employees are now faced with the problem of what to eat with the stable salary that can not compete with the way price of goods are surging high. How I hope the government can look into this matter and help us.

[ultrloa]

The rate the price of food is going high is very surprising and the government is not even doing anything about it. Salary earners are getting choked up because of the price of food stuffs are going high but salary does not increase at all. Employees are now faced with the problem of what to eat with the stable salary that can not compete with the way price of goods are surging high. How I hope the government can look into this matter and help us.

Maybe they are doing something but they are just defeated by increasing demand and low supply coming to their country. Minimum salary earners are really choke up by the inflation rate rise because the purchasing powers of their salary gotten every 15 days or monthly decrease and this totally hurt so much to majority that's why since this issues shown already maybe they should finds ways in future that there's no food crisis will happen to their country and maybe they should boost their agricultural sector to increase the food supply in their country.

[Lubcub62]

for developing countries. inflation of around 10% has become commonplace. could be even more.
but at the level of a developed country like the UK, it will definitely be in the spotlight. because many developing countries highlight developed countries such as England. and indeed it is rare in developed countries that they can be hit by inflation today. it shows the severity of the economic conditions today in various countries. so that even developed countries are affected.

[Vaskiy]

for developing countries. inflation of around 10% has become commonplace. could be even more.
but at the level of a developed country like the UK, it will definitely be in the spotlight. because many developing countries highlight developed countries such as England. and indeed it is rare in developed countries that they can be hit by inflation today. it shows the severity of the economic conditions today in various countries. so that even developed countries are affected.

Inflation is found high on each and every country. As stated the higher inflation during the time of growth is common, but the same over a country that has already established as a developed country shows that economy around the world is getting worse with time. This time everything has happened altogether, the pandemic, the economic crisis, and the food crisis. In some aspect this destruction is initiated by pandemic and further has caused economic decline and food shortage.

[Ultegra134]

It's honestly depressing and keeps worsening month by month. I'm from Greece, and inflation reached 11.3% in May, the highest in 29 years. It's even worse than the UK and most European countries, to be precise. The average cost of Unleaded 95 petrol is even higher than UK's, ranging from €2.40-€2.50 and even reaching €2.70 in a few islands.

The war isn't coming to an end anytime soon, while it has also been used as a way of speculation to increase prices and never lower them ever again. At the same time, the average wage hardly exceeds €700 - €900 after taxes.

[Don Pedro Dinero]

Yeah, well, In the UK it is the same as in the rest of the world. Monetary policies and energy price rises have had an impact on prices, and that is what we are seeing. With this, the central banks, who did not want to, are forced to raise interest rates, but we will see how long they can hold out.

And I don't know what politicians are doing if they don't make lower energy prices a priority. Especially in Europe, where they seem bent on shooting themselves in the foot.

[Gyfts]

The Bank of England last week implemented a fifth consecutive hike to interest rates, though stopped short of the aggressive hikes seen in the U.S. and Switzerland, as it looks to tame inflation without compounding the current economic slowdown.
More than four in five people in the U.K. are worried about rising living costs and their ability to afford basics necessities like food and energy over the coming months, according to a new survey.

All signs point to a global economic slow down. There isn't a way the central banks can recover from having borrowed/printed so much money in order sustain the economy during COVID without raising interest rates significantly and growth slowing down to a recession.

Keep in mind the war is still "fresh" in Ukraine. Expectations are that it could last years. The cost of consumer goods will only go up as countries begin hoarding resources fearing uncertainty.

[hugeblack]

High inflation has many causes and could be outside the control of the United Kingdom, so blaming the central bank policy will not be useful, but it is responsible for part of it by the delay in raising interest rates. What matters now is that the crisis has occurred and must be managed, so the bank acted within months The next one will clarify whether inflation will be under control or whether the problem will increase.

In general, I have visited and lived for several months in countries with a runaway inflation rate of more than 20%, prices change every few days, so people should get used to these fluctuations in the short term.

[avikz]

I am wondering is it only the effect of higher fuel prices or Brexit is also responsible for this to some extent. Europe really need to gear up itself for tough times ahead.

Brexit is not responsible for this inflation. High energy prices is one of the major reasons behind this. Price of the commodities is heavily dependent on the fuel price. With the ongoing Russia Ukraine war, the fuel is being sold at a premium. OPEC countries are not increasing the supply while their is demand, adding up to the supply stress leading to consumer inflation.

Also when the economy is rising, when people are making a lot of money, it usually leads to overspending which artificially increases the demand. So if supply remains same, it leads to a price surge. Central bank increases the interest rate to suck out money from the economy so that people don't overspend.

9.1% is really huge for a low interest European country to be honest.

[laredo7mm]

What happens to the west policy of sanction? Didn't they want to cripple Russia's economy? The time for UK and USA is coming to an end. Their unipolar word system will no longer work and we are going to see some new powerhouse raise. What China is doing is a warning to the west. Now they have the capability to challenge the USA naval fleet near their cost line.

[el kaka22]

It is going to take a while but the world will do better I can guarantee that. Banks are increasing the interest rate, which means that we are going to eventually see a situation where people will be putting most of that money into interest, and there won't be much money left in the market, meaning gas prices and food prices all of them would have to stay. They won't go down that easily, that would probably not happen, I am guessing that they will just not go up like it did for the past few months.

If we can handle that, then we are going to be doing something decent and it will definitely not be that terrible. If that's the case then food prices and all prices will stay, our wages will grow, and we will get used to all of this.