May 20, 2022
Supermarket shelves in the UK

Consumer price inflation (CPI) in the UK has risen to 6.2%, the highest level in 30 years, according to the country’s Office for National Statistics (ONS).

ONS figures showed a jump from 5.5% in January, to a figure exceeding the median analyst prediction of 5.9%. The increase has been driven mainly by surging energy prices, which has seen household bills increase by 25% in the past 12 months, and rising petrol costs.

The knock-on effects have reached into the majority of sectors, with any business making use of physical premises or logistics experiencing increased expenses which are passed to consumers. The ONS also confirmed that food prices have risen across all lines, along with higher prices for clothing, furniture and a number of other consumer items.

The latest rise sees UK inflation at its highest level since March 1992, when it hit 7.1%. Last week the Bank of England warned that it expects a further rise to 8% by April and possibly even double figures by fall if the government fails to address rising energy prices.

Inflation levels in the UK are in line with the EU average, but considerably lower than in the US where the level has been rising faster and reached 8.1% in December.

Rishi Sunak, the government minister in charge of the UK’s finances, is expected to announce measures to ease the financial burden on households today, with a number of organizations warning that the country is facing its worst cost of living crisis in decades and many still recovering from the financial impact of the Covid pandemic.

Options open to Sunak include reducing fuel duty and increasing welfare payments. Charities have warned that without increased welfare payments thousands of households run the risk of falling below the poverty line.

Opposition politicians and charities have called on Sunak to reverse a decision to increase national insurance contributions, a levy on workers in the UK that funds their welfare system. It is understood though that this is not one of the options the minister is considering.