Increasing fuel prices help drive up inflation

Food and fuel prices sparked a higher than expected inflation rate last month, new figures reveal.

The Office for National Statistics (ONS) said the Consumer Prices Index (CPI) rose to 2.5% in June – up from 2.1% the previous month and further above the Bank of England's 2% target.

The figures come amid global concerns over the potential for soaring inflation, with the US posting an inflation rate of 5.4%.

The Bank of England has warned that inflation could hit 3% by the end of the year.

Jonathan Athow, ONS deputy national statistician for economic statistics, said: "Inflation rose for the fourth consecutive month to its highest rate for almost three years.

"The rise was widespread, coming from price increases for food to second-hand cars where there are reports of increased demand.

"Increased prices for clothing and footwear, compared with the normal seasonal pattern, also added to the upward pressure this month."

The ONS said that food and non-alcoholic drinks contributed to the lift in inflation, after a 0.2% price rise for the month compared with a drop during the same period last year.

The price of petrol increased by 2.5p between May and June – to its highest price since October 2018.

The price has risen by more than 20% over the past year, representing the biggest annual increase for more than a decade.

The rise in second-hand car prices follows reports that some buyers moved to the used car market because of delays to the supply of new cars caused by the shortage of semiconductor chips.