UK inflation hits fresh 40-year high of 9.1%

UK inflation has risen to 9.1% in May from 9% in April as the cost of living crisis squeezes UK households.

It’s the highest since March 1982, according to the figures from the Office for National Statistics (ONS).

Read more: UK firms holding back on raising prices despite record high inflation

Inflation had already hit a 40-year high when it reached 9% the previous month. The latest figures mean inflation is almost five times higher than the Bank of England (BoE) target of 2%.

Prices rose 0.7% in the month alone, which marks a slowdown from the 2.5% pace recorded in April when the new energy price cap came into effect. Still, the numbers show prices are rising across the economy.

Average petrol and diesel prices in May were the highest on record, the ONS said — 165.9 pence per litre for petrol, compared with 127.2p a year earlier, and 179.7p per litre for diesel.

The 12-month rate for motor fuels was 32.8%, the highest since before the start of the data series in January 1989.

“Though still at historically high levels, the annual inflation rate was little changed in May,” said ONS chief economist Grant Fitzner.

“Continued steep food price rises and record high petrol prices were offset by clothing costs rising by less than this time last year, and a drop in often fluctuating computer games prices.

“The price of goods leaving factories rose at their fastest rate in 45 years, driven by widespread food price rises, while the cost of raw materials leapt at their fastest rate on record.”

The retail price index, which is used to determine train ticket prices and to which some index-linked bonds are pegged, surged 11.7%.

Chancellor Rishi Sunak said: “I know that people are worried about the rising cost of living, which is why we have taken targeted action to help families, getting £1,200 to the eight million most vulnerable households.

“We are using all the tools at our disposal to bring inflation down and combat rising prices – we can build a stronger economy through independent monetary policy, responsible fiscal policy which doesn't add to inflationary pressures, and by boosting our long-term productivity and growth."

Read more: UK inflation set to hit 9.1% as cost of living bites

Connor Campbell at NerdWallet said: “A further spike in inflation was expected – but this will offer little comfort to struggling households, particularly as wages aren’t keeping up. Indeed, recent research from NerdWallet found that almost half (46%) of UK SMEs have not raised employee wages in line with inflation, suggesting that the financial strain will persist for some time."

Watch: How does inflation affect interest rates?