Surging petrol and food prices last month pushed British inflation to its highest rate in 40 years, according to official figures

Surging petrol and food prices last month pushed British inflation to its highest rate in 40 years, according to official figures out this morning.

The Office for National Statistics said annual consumer price inflation rose in June to 9.4%, the highest since February 1982,up from May’s 9.1%

The ONS pointed to a 42% year-on-year rise in petrol prices and an almost 10% increase in food prices as the main drivers of inflation last month, a hammer blow for families on low incomes.

Rebecca McDonald, Chief Economist at the independent Joseph Rowntree Foundation said:

“With inflation reaching 9.4% and wiping out pay increases, the cost of living crisis is only worsening and no time can be lost in preparing the country for profoundly difficult months to come. Watching events in Westminster, you could conclude that the crisis has been paused – if you are struggling to take showers and put food on the table it won’t feel like it.

“Just last month we found that about 7 million households have already missed out on essentials like heating, toiletries or showers because they couldn’t afford them. Now the cost of essentials such as food is rising again and more people than ever are enduring a year of financial fear. This country still has a government and families under pressure will be wondering why further urgent solutions needed to shore up family finances ahead of the winter are not yet being put in place.

“A simple thing the government can do now is to stop deducting debt repayments from benefits at unaffordable rates, which leaves too little to cover the essentials at the best of times. All those putting themselves forward to lead the UK should pledge to increase basic Universal Credit entitlements to ensure that our social security system always, at a minimum, enables people to afford the essentials when they fall on hard times.”

Anna Leach, CBI Deputy Chief Economist, said:

“Inflation hit another multi-decade high in June. The labour market is still tight, global price pressures strong and another rise in Ofgem’s energy price cap is in the offing. As a result, inflation is likely to stay high for the rest of this year, severely eating into strained household incomes.

“This data underscores the need to give people more control over their energy bills: through speeding up planning decisions for electricity infrastructure and creating a national effort to help households better insulate their homes.

“But to build resilience to price shocks over the longer-term, the government needs to focus on boosting the economy’s supply potential. Incentivising investment through a permanent successor to the super deduction and supporting the development of green infrastructure are crucial first steps.”

TUC General Secretary Frances O’Gradysaid:

“Families are under immense pressure as food and energy costs soar, and companies raise prices much faster than wages.

“We need profit restraint and pay rises that keep up with prices. And the government must play its part with decent pay rises for public servants.

“If we do not do more to get pay rising, struggling workers will cut back their spending. Businesses will suffer, and we risk entering a recession.”

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