UK Inflation Reaches Highest Level in 33 Years

The threat of rising prices, which has triggered high inflation, is now hitting the UK. Amidst the country's economic uncertainty, Prime Minister Boris Johnson was forced to resign.

According to data from the Office for National Statistics (ONS), UK inflation reached 9.4% (year-on-year/yoy) in June 2022. This figure is an increase compared to the previous month's 9.1% (yoy).

UK inflation has seen increases for the past nine months since October 2021. This level is also the highest in the last 33 years since the start of the consumer price index (CPI) calculation, as shown in the graph.

Inflation measuring the cost of housing (CPIH) also rose to 8.2% (yoy) in June 2022 from 7.9% (yoy) the previous month. In its release, the ONS stated that rising vehicle fuel and food prices were the drivers of the increase in June 2022 inflation compared to the previous month.

Transport inflation reached 15.2% (yoy) in June 2022. This is the highest level in the last two years. In the transport sector, high inflation in June was caused by a 42.3% increase in fuel prices over the past year. This is the highest level since the start of inflation calculations in January 1989.

"The average price of gasoline reached 184 pence per liter in June 2022 compared to 129.7 pence per liter a year earlier. This is the highest price since 1990. Similarly, the price of diesel also rose to a record high of 192.4 pence per liter," as stated in the release.

Meanwhile, the price of food and non-alcoholic beverages rose 9.8% (yoy) in June 2022, jumping from 8.7% (yoy) the previous month. Food inflation last month was driven by rising prices of milk, cheese, and eggs.