Price rises speed up again as economy unlocks

The UK inflation rate hit 2.5% in the year to June, the highest for nearly three years, as the unlocking of the UK economy continued.

The Consumer Prices Index measure of inflation rose from 2.1% in May, the Office for National Statistics said, driven by higher food and fuel costs.

The rate is higher than the Bank of England’s 2% inflation target for a second month.

That will fuel the debate about whether interest rates need to go up.

As well as food from shops, eating and drinking out also cost more, while clothing and footwear, usually cheaper at this time of year, went up in price instead.

Second-hand car prices rose between May and June this year, whereas in recent years, they have fallen between these months, the ONS said.

Some buyers were reported to have turned to the used car market as a result of delays in the supply of new cars caused by the shortage of semiconductor chips used in their production.

June’s reading was above most economists’ forecasts of an increase of about 2.2%.

ONS deputy national statistician for economic statistics Jonathan Athow said: “The rise was widespread, for example coming from price increases for food and for second-hand cars, where there are reports of increased demand.

“Some of the increase is from temporary effects, for example, rising fuel prices which continue to increase inflation, but much of this is due to prices recovering from lows earlier in the pandemic.

“An increase in prices for clothing and footwear, compared with the normal seasonal pattern of summer sales, also added to the upward pressure this month.”

Retail Prices Index (RPI) inflation, an older measure that is still used to calculate certain cost-of-living increases, rose to 3.9% in June, from 3.3% in May.

The latest rise in the inflation rate will add to pressure on the Bank of England to consider increasing interest rates to cool the economy.

The Bank’s rate-setting Monetary Policy Committee (MPC) has taken the view that the current inflation surge is “transitory” and will fall back after peaking at 3%.

But the Bank’s departing chief economist, Andy Haldane, warned last month that the risk of high inflation was “rising fast” and could reach nearly 4% this year.

Like this article? Share on

Facebook
Linkdin
Twitter
Telegram
WhatsApp

Related articles

Information about our own complaints process, raising concerns to the Legal Ombudsman and to us

We want to give you the best possible service. However, if at any point you become unhappy or concerned about the service we provided then you should inform us immediately, so that we can do our best to resolve the problem.

In the first instance it may be helpful to contact the person who is working on your case to discuss your concerns and we will do our best to resolve any issues at this stage. If you would like to make a formal complaint, then you can read our full complaints procedure here. Making a complaint will not affect how we handle your case.

The Solicitors Regulation Authority can help you if you are concerned about our behaviour. This could be for things like dishonesty, taking or losing your money or treating you unfairly because of your age, a disability or other characteristic. 

You can raise your concerns with the Solicitors Regulation Authority.

What do to if we cannot resolve your complaint

The Legal Ombudsman can help you if we are unable to resolve your complaint ourselves. They will look at your complaint independently and it will not affect how we handle your case.

Before accepting a complaint for investigation, the Legal Ombudsman will check that you have tried to resolve your complaint with us first. If you have, then you must take your complaint to the Legal Ombudsman:

  • Within six months of receiving our final response to your complaint; and,
  • Within one year of the date of the act or omission about which you are concerned; or
  • Within one year of you realising that there was a concern.

 

If you would like more information about the Legal Ombudsman, you can contact them at the following details:

 Contact details

This website uses cookies to ensure you get the best experience on our website. By closing this message, you consent to our cookies on this device in accordance with our cookie policy unless you have disabled them.