Food price rises push inflation up to 2.5%
DEARER food and petrol sent inflation soaring last month to a near-three year high.
The Consumer Prices Index (CPI) shot up to 2.5 per cent from 2.1 per cent in May, widening the gap from the Bank of England 2 per cent target.
The June figure also shattered the predictions of City analysts, who had anticipated 2.2 per cent.
It adds to global fears of soaring inflation, with the US recording an inflation rate of 5.4 per cent for June.
The Bank of England has warned that UK inflation may go as high as 3 per cent by the end of the year.
Jonathan Athow, deputy national statistician at the Office for National Statistics, said: “Inflation rose for the fourth consecutive month to its highest rate for almost three years.
The rise was widespread – for example, coming from price increases for food and for secondhand cars where there are reports of increased demand.
“Some of the increase is from temporary effects – for example, rising fuel prices.
“But much of this is due to prices recovering from lows earlier in the pandemic.”
Top food price rises were bread and cereal.
Petrol cost an extra 2.5p per litre. Fuel prices have risen by more than a fifth in a year, the biggest annual increase for over than a decade.
The Retail Price Index, a separate measure, increased to 3.9 per cent – the highest since January 2018.
Robert Alster, of wealth manager Close Brothers Asset Management, said: “With the furlough scheme coming to an end...the Bank will be keen to hold off from making any decision on interest rates unless inflation looks like it’s rising too quickly.”