© Reuters. FILE PHOTO: A man buys fruit and vegetables at the Brixton Market during the spread of coronavirus disease (COVID-19) in London, England, September 27, 2020.REUTERS/Simon Dawson
LONDON (Reuters) – Soaring food prices pushed consumer price inflation in Britain to a 40-year high of 9.1% last month, the highest level among the G7 nations, underscoring the severity of the cost-of-living crunch.
The data was up from 9.0% in April and was in line with a Reuters poll of economists. Inflation in May was the highest since March 1982, historical records from the Office for National Statistics show – and worse could be on the horizon.
Yael Selfin, chief UK economist at KPMG, said: “Rising inflation has put further pressure on policymakers to ease the burden on households while complicating the Bank of England’s mandate.”
The Bank of England said last week that inflation is likely to remain above 9% for the next few months before peaking at just over 11% in October, when regulated household energy bills will rise again.
British Chancellor of the Exchequer Sunak said in response to the data that the British government is doing everything it can to deal with the price surge.
Prices of food and non-alcoholic goods rose 8.7% in May from a year earlier — the biggest gain since March 2009 and made the category the biggest driver of annual inflation last month.
Headline consumer prices rose 0.7% on the month in May, slightly above the 0.6% consensus, the ONS said.
Headline inflation in the UK in May was higher than in the US, France, Germany and Italy. While Japan and Canada have yet to release consumer price data for May, neither is likely to come close.