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Inflation hits ‘shocking’ highest rate for four decades

Inflation hits ‘shocking’ highest rate for four decades

Consumer price index (CPI) inflation hit 9 per cent last month, its highest rate in four decades.

CPI Inflation rose by 2 percentage points between March and April this year – the sharpest monthly increase since 1980.

The Bank of England previously said inflation could hit 10 per cent by the end of 2022.

This recent surge was driven by rising household energy bills, with the energy price cap increasing by £693 (54 per cent) for the typical family in April. Households had already seen petrol prices reach their highest real rate since 2012, and some of the impact of higher energy prices is still to come through with rising costs for businesses likely to be passed on to consumers later in the year.


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Other big drivers of inflation include food prices which rose by 6.7 per cent (the highest level since 2011), and durable goods, where prices rose 8.5 per cent (the second highest rate on record).

Foreign Secretary Liz Truss has suggesed tax cuts are the best way to mammoth ongoing cost of living issues, telling BBC Radio 4’s Today programme: “The key response to the huge global inflation crisis we’re facing is to make sure our economy grows – that’s what’s going to help people.

“To do that we need to attract business investment… What we know is a low-tax economy helps deliver that business investment, helps deliver those jobs.”

Labour’s shadow chancellor Rachel Reeves reiterated her previous calls for an emergency budget, stating this morning: “Today’s inflation data will add to the worries families already face as prices soar and pay packets are crunched.

She added: “Our country faces a cost of living crisis, and a growth crisis. Neither are inevitable but a consequence of government policies and Conservative choices. We need an emergency Budget now from the Government to tackle the cost of living crisis, and we need a real plan for growth so we have a fairer and more prosperous economy.”

Last month the government hiked National Insurance contributions at the same time as the energy price cap rose, along with council tax in many local authorities.

Analysis of the latest data by the Resolution Foundation think tank shows that inflation is – at 10.2 per cent – significantly higher for…

Read Full Story At: Politico.co.uk.

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