Inflation hits 14-month high

Inflation surged to a 14-month high in June as rising prices at the fuel pumps and discounting by fashion retailers intensified pressure on households. Consumer Prices Index (CPI) inflation rose to 2.9% last month, from 2.7% in May, the (ONS) said.

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Cost of living crisis 'getting worse' with inflation rises

A 14-month inflation high in June saw a surge in prices at petrol pumps and on supermarket shelves. Credit: Lewis Whyld/PA Wire/Press Association Images

A 14-month inflation high due to rising fuel, food and retail prices shows that the "cost of living crisis is getting worse", according to Labour's Shadow Treasury Minister.

Catherine McKinnell MP says today's inflation increases and high prices are making it financially difficult for people and families throughout the UK.

"With prices now rising much faster than wages the cost of living crisis is getting worse. Despite all the complacent claims from Ministers about the economy, these figures show that for ordinary people life is getting harder under David Cameron's government.

She added: "After inflation, wages are down by an average of over £1300 since this Government came to power. Millionaires have got a huge tax cut, but millions of people on middle and low incomes are worse off under the Tories."

Treasury: Gov't has 'helped families with living costs'

The Government is helping families with the rising costs of living, according to The Treasury, as new figures show a 14-month high in inflation, indicating high prices.

Although inflation is down from its peak of 5.2% in 2011, the consumer price index rose to 2.9% in June, from 2.7% in May.

At the same time, to help families with the cost of living, the Government has increased the tax-free personal allowance to £10,000, which will take 2.4 million people out of income tax altogether and save a typical basic rate taxpayer almost £600, and frozen fuel duty, which has kept petrol prices 13p per litre lower than they would otherwise have been.

– Treasury Spokesman

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Inflation set to be more than double wage rises

The ratio of inflation to wage rises means real-terms spending power is eroded. Credit: PA

If today's inflation figures exceed 3%, they will continue to erode consumers' spending power and savings and significantly outstrip wage rises, which increased by just 1.3% in the three months to April compared with a year earlier.

Inflation last hit 3% in April 2012 and has remained stuck above the Bank's 2% target since December 2009.

Figures from the British Retail Consortium recently showed food price inflation rose to 2.7% in June from 2.4% in May, as seasonal price pressures bled through to higher shelf prices.

However, prices of non-food items fell 1.9% in June from 1.5% a month earlier.

Inflation figures set to hit 14-month high

New Bank of England Mark Carney might have to write a letter of explanation to the Chancellor. Credit: PA

Inflation figures are set to hit a 14-month high today after June saw a surge in prices at petrol pumps and on supermarket shelves.

Consumer Prices Index (CPI) inflation is expected to rise to around 3% from May's 2.7% level, when rising air fares and more expensive clothing and footwear intensified the squeeze on consumers.

New Bank of England governor Mark Carney will have to write a letter to Chancellor George Osborne explaining why prices are rising so fast if the figure from the Office for National Statistics (ONS) exceeds 3%.

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