The UK’s rate of inflation soared to its highest for almost three years in June on the back of increases in the prices of food and motor fuel.
The Office for National Statistics (ONS) said the Consumer Prices Index (CPI) rose to 2.5 per cent from a figure of 2.1 per cent the previous month, moving further away from the Bank of England’s two per cent target.
The official figure again overshot the expectations of analysts, who had predicted that it would rise to 2.2 per cent for the month.
It is also the highest inflation rate since the UK saw a 2.7 per cent rise in August 2018.
The ONS said that food and non-alcoholic drinks contributed to the lift in inflation, after a 0.2 per cent price rise for the month compared with significant deflation for the same period last year.
Within food, the largest shift was caused by bread and cereal prices, where prices of items such as packs of individual cakes and crumpets rose this year but fell a year ago.
The reading comes amid global concerns over the potential for soaring inflation, with the US posting its own 5.4 per cent CPI inflation rate for June on Tuesday.
The Bank of England has warned that inflation could hit three per cent by the end of the year.
“Inflation rose for the fourth consecutive month to its highest rate for almost three years,” ONS deputy national statistician for economic statistics Jonathan Athow said:
“The rise was widespread – for example, coming from price increases for food and for second-hand cars where there are reports of increased demand.
“Some of the increase is from temporary effects – for example, rising fuel prices, which continue to increase inflation, but much of this is due to prices recovering from lows earlier in the pandemic.
“An increase in prices for clothing and footwear, compared with the normal seasonal pattern of summer sales, also added to the upward pressure this month.”
Meanwhile, the price of petrol increased by 2.5p between May and June, rising to its highest price since October 2018.
Motor fuels have risen by more than 20 per cent over the past year, the ONS said, representing the biggest annual increase for more than a decade.
The Retail Price Index (RPI), a separate measure of inflation, increased to 3.9 per cent – the highest since January 2018.
The CPI, including owner-occupiers’ housing costs (CPIH) – the ONS’s preferred measure of inflation – was 2.4 per cent for the month, compared with 2.1 per cent in May.
with PA Wires