Rising food and petrol prices send inflation ever closer to double digits

Rising food and fuel prices sent CPI inflation to a fresh 40-year high of 9.4 per cent in June, and to 10.6 per cent for the poorest households, the Resolution Foundation said in response to the latest ONS inflation data today (Wednesday).

The latest inflation rise was driven by the sharpest single month rise in petrol prices since at least 1989 and food price inflation, which hit a 13-year high 9.8 per cent.

The Foundation notes that there is a 1.5 percentage point cost-of-living gap between the richest and poorest tenth of households, with the latter experiencing an inflation rate of 10.6 per cent (compared 9 per cent for the richest tenth).

High producer price inflation – which hit 17 per cent in June – suggests there are further inflation rises for consumers in the coming months.

Jack Leslie, Senior Economist at the Resolution Foundation, said:

“Rising petrol and food prices sent inflation ever closer to double digits last month. But this is already a reality for low-income families as they spend a greater share of their budgets on essentials like food and energy bills.

“While high inflation won’t last forever, it is likely to be with us for some time as energy bills soar again this winter. This will mean further falls in real pay.”