Food and petrol price rises drive UK inflation higher in June

The UK’s rate of inflation soared to its highest for almost three years in June on the back of increases in the prices of food and motor fuel.

The Office for National Statistics (ONS) said the Consumer Prices Index (CPI) rose to 2.5% from a figure of 2.1% the previous month, moving further away from the Bank of England’s 2% target.

The official figure again overshot the expectations of analysts, who had predicted that it would rise to 2.2% for the month.

It is also the highest inflation rate since the UK saw a 2.7% rise in August 2018.

The reading comes amid global concerns over the potential for soaring inflation, with the US posting its own 5.4% CPI inflation rate for June on Tuesday.

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 – for example, coming from price increases for food and for second-hand cars where there are reports of increased demand.

a person riding a bicycle in front of a building: The Bank of England has set a 2% target rate of inflation (Kirsty O’Connor/PA)© Provided by PA Media The Bank of England has set a 2% target rate of inflation (Kirsty O’Connor/PA)

“Some of the increase is from temporary effects – for example, rising fuel prices, which continue to increase inflation, but much of this is due to prices recovering from lows earlier in the pandemic.

“An increase in prices for clothing and footwear, compared with the normal seasonal pattern of summer sales, 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 significant deflation for the same period last year.

Within food, the largest shift was caused by bread and cereal prices, where prices of items such as packs of individual cakes and crumpets rose this year but fell a year ago.

Meanwhile, the price of petrol increased by 2.5p between May and June, rising to its highest price since October 2018.

Motor fuels have risen by more than 20% over the past year, the ONS said, representing the biggest annual increase for more than a decade.

Elsewhere, a rise in second-hand car prices also contributed to inflation, with reports that prices were buoyed by higher demand at the end of the latest lockdown.

There have also been suggestions that some buyers moved to the used car market amid delays to the supply of new cars caused by the shortage of semiconductor chips used in production.

The Retail Price Index (RPI), a separate measure of inflation, increased to 3.9% – the highest since January 2018.

The CPI, including owner-occupiers’ housing costs (CPIH) – the ONS’s preferred measure of inflation – was 2.4% for the month, compared with 2.1% in May.


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