June 26, 2023

According to data released, the day before Britain’s central bank is widely anticipated to raise interest rates once more, the country’s inflation rate remained stable in May, confounding hopes that price hikes would slow down.

Similar to April, consumer prices increased by 8.7 percent from a year earlier, according to the Office for National Statistics. Analysts had predicted a small decline. The information is probably going to increase worries that Britain’s cost-of-living crisis would worsen in the upcoming months as mortgage holders deal with the burden of higher interest rates that are being forced through to combat inflation.

In order to combat persistently rising inflation pressures, the Bank of England is anticipated to increase interest rates for a 13th time in a row, to 4.75 percent, the highest level since early 2008.

Last week’s wage report revealed pay growth that was quicker than anticipated. The statistics office reported on Wednesday that core inflation, which is used to gauge how profoundly an economy is being affected by inflation and excludes the cost of oil and food, increased to 7.1 percent in the year through May, the quickest rate since 1992. Policymakers pay great attention to this metric, as it increased from 6.9% in April to 7.4% in May.

The increase in core inflation is “something that may cause some concern,” according to Grant Fitzner, the statistics agency’s chief economist, who spoke to the BBC.

Source: New York Times
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