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UK Inflation Hits a New 40-year High of 9.1%

May saw a 9.1 percent year-over-year increase in Inflation Hitsin the UK as the nation’s cost-of-living situation continues to worsen. The consumer price index increased by 9.1% on Wednesday, which was slightly more than the 9% increase that was seen in April and in line with experts’ predictions according to a Reuters poll.

In May, consumer prices increased by 0.7 percent month over month, which was somewhat more than expected at 0.6 percent but much below the 2.5 percent monthly increase in April, suggesting that Inflation is moderately decreasing. The U.K.’s Office for National Statistics stated in its communications accompanying the numbers on Wednesday that its estimations indicated Inflation “would last have been greater around 1982, where estimates vary from about 11 percent in January down to roughly 6.5 percent in December.”

Housing and household services, including electricity, gas, and other fuels, as well as transportation, made the biggest increases in the Inflation rate (mostly motor fuel and second-hand cars). In the 12 months ending in May, the Consumer Prices Index including Owner Occupants’ Housing Costs (CPIH) increased from 7.8 to 7.9 percent.

In its report, the ONS noted that between April and May 2022, “rising prices for food and non-alcoholic beverages, compared with falls a year ago, resulted in the largest upward contribution to the change in both the CPIH and CPI 12-month Inflation rates (0.17 percentage points for CPIH)”. In an effort to control without aggravating the present economic slump, the Bank of England raised interest rates for the fifth time in a row last week. However, it refrained from raising rates as aggressively as the U.S. and Switzerland had.

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