UK inflation stays at 8.7%

The UK’s rate of infla­tion plateaued at 8.7% in May, data pub­lished by the Office for Nation­al Sta­tis­tics (ONS) has shown.

Infla­tion was expect­ed to fall in May but remained at 8.7% — the same rate as was record­ed in April. The rate of 8.7% is high­er than econ­o­mists had expect­ed, and many now antic­i­pate a rise in inter­est rates.

Experts have stat­ed that so-called ‘core infla­tion’ — which excludes volatile ele­ments such as food, fuel and ener­gy prices – is now at its high­est lev­el in the UK for over 30 years. Many warn that the high infla­tion rate will have knock-on effects for mort­gages.

UK infla­tion is high­er than infla­tion rates in com­pa­ra­ble coun­tries, the data revealed: Ger­many record­ed a rate of infla­tion of 6.3%; France’s rate is cur­rent­ly 6%; and the USA’s infla­tion rate is 2.7%.

Chan­cel­lor Jere­my Hunt said:

‘We need to squeeze every last drop of high infla­tion out of the econ­o­my.

‘Infla­tion is the biggest, the most invid­i­ous, tax rise the British peo­ple are fac­ing right at the moment because it is erod­ing the val­ue of their salaries – so that is our pri­ma­ry pri­or­i­ty.’

Inter­net link: Office for Nation­al Sta­tis­tics web­site