According to the British ONS on the 21st, core inflation in May, excluding volatile items such as energy and food, was 7.1% year-on-year. It is not only up from April (6.8%), but also the highest since March 1992. Consumer price growth in May was 8.7 percent year-on-year. It was the same as the annual increase rate in April, but it was higher than experts’ estimates (8.4%). The UK consumer price growth rate has been higher than expected for the fourth consecutive month. “Despite falling gasoline prices, airfare, travel, concert admission, and computer game prices have increased inflation,” the British National Statistical Office said.
The increase in food and non-mainstream beverage prices was 18.3%, down from the previous month (19.0%), but is still very high. Grant Fitzner said in a BBC interview that “wage increases are affecting prices.” “Looking at the root inflation rate, companies seem to be passing on the cost of wage increases to consumers,” said Yael Selpin, chief economist at KPMG.
The UK consumer price growth rate in May is higher than that of other major countries such as France (6.0%), Germany (6.3%), the European Union (EU·7.1%), and the United States (2.7%). Except for the UK, these countries saw a slight drop in inflation in May. As inflation is not easily determined, the Bank of England (BOE), the central bank of the United Kingdom, is also expected to continue tightening (interest rate hike).
Financial markets expect the BOE to raise its key interest rate from 4.5% per annum to 4.75% per annum on the 22nd, making it its 13th consecutive increase. When inflation was announced on the same day, expectations for a 0.5 percentage point increase were raised, while some predicted that the benchmark interest rate would rise to 6% per annum early next year. The public net debt announced separately by the National Statistical Office was 2.567 trillion pounds as of the end of May, exceeding the gross domestic product (GDP) for the first time since 1961
