LONDON (CNBC) — UK inflation hit yet another new 40-year high in June as food and energy prices continued to soar, escalating the country’s historic cost-of-living crisis.
The consumer price index rose 9.4% annually, according to estimates out Wednesday, slightly above a consensus forecast among economists polled by Reuters and up from 9.1% in May.
This represented a 0.8% monthly incline in consumer prices, exceeding the previous month’s 0.7% rise but remaining short of the 2.5% monthly increase in April.
The UK’s Office for National Statistics said in Wednesday’s report that its indicative modelled consumer price inflation estimates “suggest that the CPI rate would last have been higher around 1982, where estimates range from nearly 11% in January down to approximately 6.5% in December.”
The most significant contributors to the rising inflation rate came from motor fuels and food, the ONS said, with the former soaring 42.3% on the year, the highest rate since before the start of the constructed historical series in 1989.
The Bank of England has implemented five consecutive 25 basis point hikes to interest rates as it looks to rein in inflation, but Governor Andrew Bailey suggested in a speech at the Mansion House Financial and Professional Services Dinner on Tuesday that the Monetary Policy Committee could consider a 50 basis point hike at its August policy meeting.
This would constitute the UK’s biggest single increase in interest rates for nearly 30 years, and Bailey vowed that there would be “no ifs or buts” in the Bank’s commitment to return inflation to its 2% target. The governor has received public criticism from several of the Conservative Party hopefuls to replace Boris Johnson as prime minister.