Inflation in the UK hits 9.1%, the highest rate in the G7

The poll, up from 9% in April, matched consensus in a Reuters poll among economists. Historical records from the Office for National Statistics show that corn inflation was the highest since March 1982 – and worse is likely to come.

Some investors believe that the UK is at risk of both sustained high inflation and recession, reflecting the country’s large imported energy bill and persistent Brexit problems, which could further damage trade relations with the EU.

“With the economic outlook so bleak, no one knows how high inflation may be and how long it will continue – making fiscal and monetary policy assessments particularly harsh,” said Jack Leslie, senior economist at the Resolution Foundation think tank.

Earlier on Wednesday, the Resolution Foundation said the cost of living for households had been exacerbated by Brexit, which had made Britain a more closed economy with detrimental long-term consequences for productivity and wages.

Britain’s total inflation in May was higher than in the United States, France, Germany and Italy. While Japan and Canada have not yet reported consumer price data for May, none of them are likely to be close.

British companies are being hit by rising prices, labor shortages and the fallout from rail strikes.

The Bank of England said last week that inflation is likely to remain above 9% in the coming months before peaking at just over 11% in October, when regulated household energy bills are set to rise again.

The British government did everything it could to combat a rise in prices, Finance Minister Rishi Sunak said after the data.

Food and non-alcoholic beverage prices rose by 8.7% in annual terms in May – the biggest jump since March 2009, making this category the biggest driver of annual inflation last month.

Overall consumer prices rose 0.7% in monthly terms in May, the ONS said, slightly more than the 0.6% consensus.

UK factory prices – a crucial factor for prices later paid by in-store consumers – were 22.1% higher in May than a year earlier, the biggest increase since those records began in 1985, ONS said.

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