Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

UK inflation rate unchanged at 8.7% in May

by June 21, 2023
June 21, 2023
UK inflation rate unchanged at 8.7% in May

Consumer price inflation failed to fall last month, piling pressure on the Bank of England to carry out an oversized increase to borrowing costs tomorrow to tackle stubbornly high prices.

Official figures showed that annual headline inflation remained steady at 8.7 per cent last month, defying expectations of a fall to 8.4 per cent that had been forecast by economists and the Bank for May.

In worrying news for rate-setters, the closely watched measure of core inflation accelerated from 6.8 per cent to 7.1 per cent, the highest since 1992. Core inflation strips out volatile items like food and energy and provides a more accurate picture of underlying price pressures in the economy.

The Office for National Statistics said the unexpectedly strong inflation was driven by the higher price of flights, live music events, and another climb in the cost of second-hand cars. It is the fourth time that inflation figures have been worse than expected this year.

Food price inflation, which peaked at over 19 per cent this year, fell back slightly to 18.4 per cent and was one of the drags on inflation, along with declining petrol prices, the ONS said. Annual inflation in health, clothing, and restaurants also accelerated in May compared with the same period last year.

Jeremy Hunt, the chancellor, responded to the figures by saying the government would “not hesitate in our resolve to support the Bank of England as it seeks to squeeze inflation out of our economy, while also providing targeted support with the cost of living”.

The Bank had been on course to raise borrowing costs by a quarter of point to 4.75 per cent on Thursday after wage figures showed that private sector salaries are accelerating at the fastest pace on record. The worse-than-expected inflation figures will raise speculation that the Bank may have to carry out a larger half a percentage point increase to take rates to 5 per cent.

Before the inflation figures were released, investors had ramped up their expectations for future rate rises to a peak of 5.75 per cent later this year. The Monetary Policy Committee has said that it will raise borrowing costs based on incoming data and if there is evidence that inflation is proving to be more persistent than expected.

The Monetary Policy Committee’s preferred measure of inflationary pressures in the services also accelerated from 6 per cent to 6.3 per cent.

Yael Selfin, chief economist at KPMG, said the data on core inflation suggested that companies “may now be passing on the rising costs from higher wage bills to consumers”.

Grant Fitzner, the ONS chief economist, said: “After last month’s fall, annual inflation was little changed in May and remains at a historically high level. The cost of air fares rose by more than a year ago and is at a higher level than usual for May. Rising prices for second-hand cars, live music events and computer games also contributed to inflation remaining high.”

Read more:
UK inflation rate unchanged at 8.7% in May

0
FacebookTwitterGoogle +Pinterest
previous post
Cost of renting hits highest in a decade
next post
Doshi Secures Pre-Seed Funding To Expand Gamified Learning To Financial Institutions

You may also like

Thousands of UK businesses could face ‘significant delays’...

August 2, 2022

45% of European VC investments fail or do...

April 13, 2023

Building Smiles and Futures: The Journey of Dr....

January 29, 2025

Business leaders want regulatory stability rather than a...

May 3, 2023

Scottish Power owner Iberdrola commits £24bn to upgrade...

October 12, 2024

Telefónica Tech Determines The Cybersecurity Environment Alterations Amidst...

August 16, 2023

Consumers Continue to Pay with Credit Cards —...

October 19, 2022

Shortlist Unveiled for NED Awards 2024

February 11, 2024

Investment focus drives Rachel Reeves’ strategy to revitalise...

October 28, 2024

Burberry to cut 1,700 jobs in global savings...

May 14, 2025

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • TSA tells Americans their Costco cards won’t fly at airport security despite love for hot dogs

      June 7, 2025
    • Trump announces China will restart rare earth mineral shipments to US after productive call

      June 7, 2025
    • Musk feud presents ‘unprecedented’ dynamic compared to past Trump disputes: expert

      June 7, 2025
    • Snub of Musk’s NASA nominee ally preceded sudden ‘big, beautiful bill’ criticism, Trump feud

      June 6, 2025
    • Supreme Court rules DOGE can access Social Security information

      June 6, 2025
    • US sanctions money laundering network aiding Iran as regime faces nuclear reprimand at IAEA

      June 6, 2025

    Categories

    • Business (8,149)
    • Investing (2,019)
    • Politics (15,558)
    • Stocks (3,134)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved