UK inflation hits 9%, highest level in 40 years, after soaring energy bills – Business Live | Business

ONS: Inflation rose sharply in April

Grant Fitzner, chief economist at the Office for National Statistics (ONS), said there had been a sharp rise in inflation last month:

“Inflation rose sharply in April, driven by the sharp rise in electricity and gas prices with the entry into force of the higher price cap.

“About three-quarters of the annual rate increase this month came from utility bills.

“We also released new modeled historical estimates today which show that annual CPI inflation was the last highest 40 years ago.

“Sharp annual increases in the cost of metals, chemicals and crude oil also continued, along with higher prices for goods leaving the factory gates.

“This was driven by increases for food products, transport equipment and metals, machinery and equipment. »

UK factories raised prices last month as they passed on higher costs to customers, the ONS reports.

Producer prices (what companies charge when they leave the factory) have been 14% higher than a year ago in April, which is the highest rate since July 2008.

Input prices (what businesses pay for energy, raw materials and parts) jumped by 18.6% over the past year, a record.

This highlights inflationary pressures in the economy as these producer prices will pass through to consumers in stores.

UK producer price inflation Photography: NSO

Inflation: the key charts

These charts highlight how quickly inflation in the UK has soared in recent months – now four times higher than the Bank of England’s 2% target.

UK inflation rate
UK inflation rate Photography: NSO
Inflation in the UK
Inflation in the UK Photography: NSO

While this chart shows the impact of lifting the energy price cap by 54% last month:

Inflation in the UK
Inflation in the UK Photography: NSO

Fuel prices at record highs

Record gasoline prices also pushed up the cost of living in April.

Average petrol prices were 161.8 pence per liter in April 2022, up from 125.5 pence per liter a year earlier, and the highest on record.

Diesel averaging 176.1 pence per litre, was also the highest on record.

As a result, fuels and lubricants have been 31.4% more expensive than a year ago – the highest inflation rate for this category since the start of the data series in January 1989, driving up the cost of automobiles and freight transportation.

Yesterday the government pressured the fuel giants to pass on the 5p per liter fuel tax cut to customers. business secretary kwasi Quarters wrote to the industry “to remind them of their responsibilities”:

My letter to petrol retailers this evening after relates to the Chancellor’s 5p fuel tax cut which is not visibly or meaningfully passed on.

The Competition and Markets Authority is now involved in this issue.

👇🏾 pic.twitter.com/a7ysGyvWWA

-Kwasi Kwarteng (@KwasiKwarteng) May 17, 2022

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My letter to petrol retailers this evening after relates to the Chancellor’s 5p fuel tax cut which is not visibly or meaningfully passed on.

The Competition and Markets Authority is now involved in this issue.

👇🏾 pic.twitter.com/a7ysGyvWWA

-Kwasi Kwarteng (@KwasiKwarteng) May 17, 2022

The lifting of the energy price cap in April led to 12-month inflation rates of 53.5% for electricity and 95.5% for gas, according to the Office for National Statistics.

Housing and household serviceswhich includes energy bills, and transportation costs such as automotive fuels, had the biggest impact on inflation.

UK inflation at 40 year high.

At 9%, the UK consumer price index is the highest since it began to be calculated in 1997.

The Office for National Statistics estimates that the CPI has not risen since 1982.

UK inflation hit 9% in April

Newsflash: The UK’s inflation rate soared to 9% in April as the cost of living crisis deepened and energy bills soared.

Inflation is having a very painful impact on the poorest families, charities and doctors warned this week.

Families struggling to cope with energy bills are seeking refuge at McDonald’s, a charity claiming beleaguered parents and children spend their evenings in fast food restaurants, relying on facilities like cooking emergency, bathroom and living room.

“People buy their kids a Happy Meal for a few pounds and keep them warm inside. Then they wash and brush their teeth in the sinks and watch TV for hours on the free wifi,” says Matthew Cole, chairman of the trustees of the Fuel Bank Foundation, an organization that tries to help families with their bills.

Action for Children warned this week that struggling families are skipping meals, wearing coats indoors to stay warm and living in the dark because they cannot afford to turn on lights.

And a poll commissioned by the Royal College of Physicians has found that more than half of people in the UK have already seen their health deteriorate due to the cost of living crisis, with doctors warning that some patients can no longer allow themselves to take care of themselves.

Doctor Andrew Godardthe president of the CPRmentioned:

“The cost of living crisis has only just begun, so the fact that one in two people are already experiencing deterioration in their health should be alarm bells ringing, especially at a time when our health service is under strain. pressure than ever,

Rishi Sunak faces Tory clamor to act now on cost of living crisis

Tory MPs are pressuring Rishi Sunak to take decisive action to tackle the cost of living crisis with measures such as reducing VAT, increasing the energy bill and increase in benefits, while inflation is expected to reach 9% on Wednesday.

A series of Tories from different wings of the party have called on the Chancellor to intervene within weeks, amid dire economic forecasts for pressure on households.

A senior Tory, Sir Bernard Jenkin, chairman of the Liaison Committee which holds the Prime Minister to account, will warn on Wednesday that “the economic situation is much worse than the government is willing to admit”.

He is expected to highlight new figures obtained from the House of Commons Library showing that pensioners and lowest income households have to pay £1,000 more a year for food and energy, arguing that any aid for they cannot “wait for the fall”.

He will say:

“Measures that need to be looked at are a £20 increase in Universal Credit, transferring the cost of green energy levies to the Treasury, removing VAT on household fuel, increasing the warm homes scheme and increasing the fuel allowance for retirees. »

Jenkin also backed the idea of ​​reducing VAT overall, as current inflation and tax increases “suck demand out of the economy.”

Here is the full story:

Introduction: UK inflation could reach 9% in April

Hello and welcome to our ongoing coverage of business, the global economy and financial markets.

The UK cost of living crisis intensified in April as households and businesses were hit by the worst cost of living crisis in decades.

The latest UK inflation data, due at 7am, is expected to post a further surge in prices last month. Economists expect consumer prices to rise by around 9.1% over the past year, which would be the highest rate of inflation in about 40 years, up from 7% in March.

Millions of households were hit by soaring energy costs last month, after Ofgem lifted the price cap on bills by 54%.

Food prices have also risen sharply, with Russia’s invasion of Ukraine driving up the cost of grain, cooking oil and meat.

Michael Hewsonanalyst at CMC MarketsExplain :

Not only do consumers have to deal with higher gas and electricity prices, but also higher food and petrol prices, as well as higher council tax, subscriptions streaming, gym memberships and other discretionary costs, as well as the pound down 9% against the dollar a year ago when it was at $1.3900.

While the headline CPI is expected to rise from 7% to over 9%, core prices are expected to rise from 5.7% to 6.2%, while the CPI is expected to rise from 9% to 11%, reaching a high of 40 years.

Heightened pressure on the cost of living will certainly lead to more calls for action from the government to help struggling families, such as more support for energy bills or increased benefits in based on the current inflation rate.

A poll yesterday found that one in four people had resorted to skipping meals, while others were borrowing money or going out less to make ends meet.

As the Bank of England warns of ‘doomsday’ food prices, new research from @IpsosFR / @SkyNews shows due to cost of living:

🔴 27% say they already skip meals
🔴65% did not turn on their heating
🔴44% have changed supermarkets
🔴44% drive less https://t.co/rYV9axQXcP pic.twitter.com/SAkH8QoiSl

—Cameron Garrett (@CameronGarrett_) May 17, 2022

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On Monday, the Governor of the Bank of England said he was unable to prevent British inflation from hitting 10% this year as most factors were beyond the control of the BoE, with the war in Ukraine likely to cause “apocalyptic” food prices.

Agenda

  • 7am BST: UK inflation report for April
  • 7am BST: UK producer price index for April
  • 9.30am BST: UK house price index for March
  • 10am BST: Eurozone inflation report for April
  • 1:30 p.m. BST: Building permits and housing starts in the United States

Updated at 06:49 BST

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