UK inflation is continuing to rise at its fastest rate for 40 years as the latest rate edged up to 9.1% in the 12 months to May, new data published by the Office for National Statistics (ONS) has revealed.

The latest 12-month Consumer Prices Index (CPI) inflation rate is up slightly on the 9.0% reported by the ONS in April.

This is now the highest CPI 12-month inflation rate in the ONS’ series which began in January 1997. The ONS also estimated that CPI would last have been higher in around 1982, when estimates range from almost 11% in January, down to approximately 6.5% in December.

After raising interest rates to 1.25% last week, the Bank of England (BoE) warned that 12-month CPI inflation could even reach as high as 11% before the end of the year.

On a monthly basis, CPI inflation also climbed by 0.7% in May, compared with a rise of 0.6% in the same month last year. Rising prices for food amid the ongoing cost-of-living crisis in the UK were a big factor in the latest inflation increase, the ONS stated.

Commenting on the latest inflation figures, partner at Killik & Co, Rachel Winter, said: “Many prices in the UK are rising faster than in the US and Europe, and this is likely to become most acute when a new energy price cap takes effect in October. 
 
“The BoE is facing a tough challenge to balance inflationary pressures and the need for economic growth. Last week’s quarter-point interest rate rise suggests it’s pursuing a more cautious approach than many other central banks. 
 
“Policymakers are clearly conscious of the risks of an entrenched wage-price spiral and have pledged to ‘act forcefully’ if required. This raises the prospect of bigger interest rate rises on the horizon. 
 
“The pace of inflation makes it more important than ever for investors to look at a long-term strategy to protect the value of their savings and buying power in the future. The modest interest rate rise last week means cash savers in particular are continuing to lose out.”

Head of personal finance at AJ Bell, Laura Suter, added: “Another factor bumping up inflation in May was mortgage costs, with the successive BoE base rate hikes pushing up mortgage rates and leading to the largest increase in costs for homeowners since 1999. These costs will continue to increase this year, as we see the impact of the latest rate rise filter through to mortgage rates and push up costs for those re-mortgaging or first-time buyers.

“Unfortunately, more gloom lies ahead, and the hopes of inflation ebbing away later this year are dead. Energy costs will drive inflation higher later this year, with the latest estimates showing that the energy price cap will now rise to £3,000 in October, far more than many had expected, and that it won’t fall in the January update either. It means one thing is for certain, this rising inflation isn’t going away any time soon and this coming winter could be tougher than the last.”

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