The UK inflation has climbed again to reach 9.4% for the 12 months to June, new data published by the Office for National Statistics (ONS) has confirmed.

This is up from the 9.1% that the ONS reported for its Consumer Prices Index (CPI) in May, as rising prices for food and fuel resulted in the largest upward contributions to the monthly rate.

Inflation has risen sharply over recent months and the June figure was again the highest annual CPI inflation rate in the ONS series, which began in January 1997. Estimates suggest that the CPI inflation rate would last have been higher in around 1982, where estimates range from almost 11% in January down to approximately 6.5% in December.

On a monthly basis, CPI inflation increased by 0.8% in June, compared with a rise of 0.5% in the same month last year. The ONS also revealed that the latest figure is the largest rise between May and June since the start of its historical constructed series in 1988.

Reacting to the latest inflation rise, savings expert at M&G Wealth, Les Cameron, said: “We now see the inflation peak is going to be higher than earlier predictions. What we don't know is where it will stop and for how long these high rates will be around.

“Inflation will hit people in various ways, so depending on your age and lifestyle your reality may seem wholly different. Those spending a lot of time at home, pensioners for example, or the new army of people working from home, may feel they are experiencing much higher inflation, with increased energy and food prices and, for many, the dramatic rise in the cost of fuel taking their toll.

“People may have been feeling the heat over the last few days, but they’ll be feeling it financially when they need to turn the central heating back on in a few months’ time.”

Managing director – capital markets and finance at LiveMore Capital, Simon Webb, added: “Until we can get some clarity on when inflation will start to stabilise, the financial markets will be choppy and pressure will continue on the Bank of England to increase the base rate. 
 
“The Bank has said it expects inflation to carry on rising this year and will start to slow down next year; and take around two years to be nearer to the 2% target. But with so much uncertainty in the world today, it’s difficult to predict.

“However, I think it is likely the base rate will increase again at the next MPC meeting, and there has been speculation that it could be a 0.5% rise instead of 0.25%. That’s even more reason for borrowers to lock into a longer-term fixed rate mortgage knowing that monthly payments won’t change for a long period of time.”

Share Story: