Inflation has now hit 9.0%, the Office for National Statistics (ONS) has confirmed, a figure that is the fastest rate of price rises for 40 years.

The ONS revealed that its Consumer Prices Index (CPI) climbed by 9.0% in the 12 months to April 2022, a level up from 7.0% in March.

This is the highest CPI 12-month inflation rate in the National Statistics series, which began in January 1997, and is also the highest recorded rate in the constructed historical series, which began in January 1989.

The ONS also recently published modelled consumer price inflation data on an indicative basis for earlier periods. These new estimates suggest that CPI would last have been higher in around 1982, where estimates range between approximately 6.5 % in December to nearly 11% in January.

Commenting on the latest data, director of investments at Wesleyan, Martin Lawrence, said that inflation has “turned into a runaway train”, moving to the highest point in decades and further off track from the Bank of England’s 2% target.

“We’re likely to see this landscape of high inflation for some time to come, so further interest rate rises are almost inevitable,” Lawrence said. “As a result, there is a growing risk of a potential UK recession on the horizon and, combined with soaring living costs for households, today’s news is unsurprising but unwelcome.

“Most families’ budgets are maxed out, but for those able to keep some money aside they need to make sure it is working as hard as possible and not languishing in accounts with low-level interest rates that will fail to keep pace with inflation.”

On a monthly basis, the figures also showed that CPI inflation rose by 2.5% in April, compared with a rise of 0.6% in the same month in 2021.

The latest increase also comes in the same week the governor of the Bank of England (BoE), Andrew Bailey, indicated that CPI inflation is likely to hit 10% in the fourth quarter.

Savings expert at M&G Wealth, Les Cameron, commented: “Those with savings, particularly those with cash or cash-like savings, need to seriously think about how their money is going to work for them over the long term. For many, this will be a decision of whether to accept inflation risk eroding the value of their money or taking investment risk to try to grow, or at least a maintain, the real value of their money.

“Persistently high levels of inflation are particularly going to affect those who are trying to save for their retirement and will now need to save more to be able to have the retirement they planned, as well as those most affected by the cost-of-living increases, such as pensioners and the new generation of homeworkers whose energy bills are rising.”

LiveMore’s MD of capital markets and finance, Simon Webb, added: “The latest rise in inflation to 9% will increase the chance of the Bank of England’s Monetary Policy Committee lifting the base rate in June, potentially by as much as 0.5%. This was the preferred option of three of the nine MPC members at their last meeting in early May. That will be a real blow for mortgage borrowers on variable rates whose monthly payments have potentially already gone up four times in five months.

“Now is the perfect time for borrowers to lock into a long-term fixed rate mortgage and this will be especially advantageous for borrowers aged 50 to 90+. Many of the upper part of that age group are unlikely to want to move home again so knowing exactly what their monthly payments are will give them peace of mind. As they move into their twilight years they won’t have to worry during these uncertain times if the Bank continues to raise the base rate.”

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