More pressure for interest rate hike as inflation fails to fall

Business

The rate of price rises has remained 8.7% despite expectations of a fall, according to official figures.

The Office for National Statistics (ONS) announced the consumer price index measure of inflation stood at 8.7% in the year up to May, the same as the rate in April.

A slight decrease, to 8.4%, had been expected by economists.

The rate has been kept high due to the rising cost of second-hand cars, live music events and computer games, the ONS chief economist said, though they were partially offset by the fall in petrol prices.

There’s been an increase in another measure of inflation being watched by the Bank of England – core inflation, which excludes volatile categories including fuel and food.

That rise bucked expectations and now stands at 7.1%, a 31 year high and up from 6.8% last month.

It was forecast to remain stagnant at 6.8%.

More on Inflation

The Bank of England has undertaken a programme of interest rate rises to bring inflation down to 2% and Wednesday’s figure will be closely watched by rate-setters ahead of the latest expected rise on Thursday.

Inflation began to increase in late 2021, when supply chain problems linked to COVID lockdowns and the associated worker shortages meant demand for goods could not be met.

Russia’s invasion of Ukraine exacerbated the problem as many countries, particularly those in Europe, scrambled to find other energy sources and reduce their use of Russian gas, which subsequently pushed up the cost of energy and many other goods.

Products You May Like

Articles You May Like

Watch Charli XCX’s New “Von Dutch” Video
Plane believed to be carrying Norway’s king departs Malaysia, a day after he received a pacemaker
Book Riot’s Deals of the Day for March 3, 2024
Ivanka Trump and her shiny sari are attempting to single-handedly revive the glamorous face of Trumpworld at Ambani’s pre-wedding bash
OpenAI says Musk claims in lawsuit ‘stem from Elon’s regrets’ he’s out