Great Britain has had the highest inflation rate of the G7 countries for months. Prime Minister Rishi Sunak has made bringing inflation down a priority. Analysts had then expected a slight decline in the rate to 8.4 percent for May, but this was not confirmed. Instead, core inflation in particular, i.e. the inflation rate excluding food and energy costs, rose to 7.1 percent.
“These numbers indicate that UK inflationary pressures are not under control and further rate hikes are required, which will continue to weigh on UK budgets,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank. The central bank had already raised interest rates to a 15-year high of 4.5 percent. The next step should now follow on Thursday.
“Despite a slight moderation in food price inflation, headline inflation remains elevated,” said Yael Selfin, chief economist at KPMG. “Even more worrying for the Bank of England is that strong core inflation suggests that businesses may be passing on rising costs from higher wage bills to consumers.” Great Britain has been gripped by an unprecedented wave of strikes for higher wages for months.
