Prices rose the fastest in more than 40 years in the 12 months to April, as households grapple with a sharp rise in energy bills.
Inflation climbed to a new all-time high of 9 percent last month, up from 7 percent in March, following a £700 increase in energy bills, the Office for National Statistics reported on Wednesday. About three quarters of the general increase in inflation was due to higher energy bills.
It comes after Bank of England (BoE) governor Andrew Bailey warned of “apocalyptic” food prices in the coming months due to the war in Ukraine. The central bank has said inflation is likely to continue rising to around 10 percent this year.
Bailey said he and other rate setters at the BoE felt “helpless” in the face of price growth generated abroad and imported into the UK.
Chancellor Rishi Sunak, who has come under pressure to provide more support to poorer households as benefits fail to keep pace with rising prices, said the Treasury could not protect people from global price pressures.
“Countries around the world are dealing with rising inflation. Today’s inflation figures are driven by the rise in the energy price ceiling in April, which is in turn driven by higher global energy prices.
“We cannot fully protect people from these global challenges, but provide significant support where we can and stand ready to take further action.”
Measures taken by the Treasury to address the cost of living crisis, including a £150 discount on the payment of council taxes for some households, have been dubbed a “postcode lottery” by charity leaders as it may fail to reach some of the most vulnerable households.
There is a growing call from business groups, charities and the opposition Labor party for an emergency budget to provide greater support to those most in need. Rachel Reeves MP, shadow chancellor of Labor said: “Today’s inflation data will add to the concerns families are already being confronted as prices rise and wage packages are cracked.
“It makes it even more unreasonable that — as they impose taxes on working people in the midst of this crisis — Conservatives voted last night against a windfall tax on oil and gas producers’ profits to lower household energy bills,” she added. ready.
The government has expressed doubts about whether to introduce such a tax, with some senior cabinet ministers expressing concern that it could discourage business investment in the UK economy.
Rain Newton-Smith, chief economist for business lobbying group CBI, said inflation is “likely to remain high, putting historic pressures on household incomes and a difficult trading environment for businesses.”
She added: “It is critical that the government explore options to help people who are now facing real hardship, and to support cash flow for vulnerable companies. Boosting business investment is also crucial, both to address the growth gap in the short term as well as to strengthen the economy’s potential to withstand future shocks.”