Inflation in the UK reached 9.1% year-on-year (YoY) in May this year amid rising food and energy prices. The figure was 9% in April. Meanwhile, the highest level of inflation in over 40 years in the United States led the Federal Reserve (Fed) to take the most aggressive step yet in its attempt to rein in inflation.
UK consumer prices rose 0.7% month on month (MoM) in May, slightly above expectations for a 0.6% rise but well below the 2 month rise .5% in April.
The UK’s Office for National Statistics said its estimates suggested inflation “would have lasted higher around 1982, where estimates range from almost 11% in January to around 6.5% in December”.
UK inflation hit 9.1% year-on-year (YoY) in May this year amid rising food and energy prices. The figure was 9% in April. Meanwhile, the highest level of inflation in over 40 years in the United States led the Federal Reserve (Fed) to take the most aggressive step yet in its attempt to rein in inflation.
The UK consumer price indexincluding homeowners’ housing costs, (CPIH) rose to 7.9% in the 12 months to May from 7.8% in April.
The main contributors to the rise in the inflation rate came from housing and household services, mainly electricity, gas and other fuels, as well as transport, British media reported.
To rein in inflation without worsening the current economic downturn, the Bank of England implemented a fifth consecutive interest rate hike last week, but halted ahead of the aggressive hikes seen in the United States.
Britain’s energy regulator has raised the household energy price cap by 54% from April 1 to deal with a spike in wholesale energy prices, including a record rise in fuel prices. gas, and has not ruled out further increases in the cap during its periodic reviews this year. .
“We at the Fed understand the difficulties caused by high inflation,” U.S. Fed Chairman Jerome Powell said at a recent press conference. “The labor market is extremely tight and inflation is way too high,” Powell said.
Since the last meeting in May, “inflation has again surprised on the upside, some indicators of inflation expectations have increased and inflation projections for this year have been revised upwards in particular”, he said. he added, explaining the reason for the 75% increase in key rates. basis points.
Powell expects an increase of 50 or 75 basis points in July. This would bring the total increase to 2.00-2.25 percentage points this year, which seemed unthinkable just a few months ago.
Fibre2Fashion (DS) News Desk