UK inflation leaps to 2.5% in June, highest since Aug 2018
- British inflation rose further above the Bank of England's target in June when it hit 2.5%, up from 2.1% in May, official data showed on Wednesday.
- Economists polled by Reuters had expected consumer price inflation (CPI) to hit 2.2% in the 12 months to June.
British inflation jumped further above the Bank of England's target in June when it hit 2.5%, its highest since August 2018 and up from 2.1% in May as the economy bounced back from coronavirus lockdowns, official data showed on Wednesday.
Higher prices for food, fuel, second-hand cars, clothing and footwear all pushed inflation up last month, the Office for National Statistics said.
The reading was above all forecasts from economists polled by Reuters who mostly had expected consumer price inflation (CPI) to hit 2.2% in the 12 months to June.
The BoE has said inflation will peak above 3% as Britain bounces back from its coronavirus lockdowns but it also thinks that the rise will be temporary and does not require it to reduce its huge stimulus for Britain's economy yet.
Core inflation, which excludes the price of food, energy, alcohol and tobacco was 2.3% in the 12 months to June compared with 2.0% in May, the ONS said.
The acceleration of inflation reflects the weakness of demand last year when much of the country's economy was shut down and consumers were ordered to stay at home. Global oil prices have climbed this year as the world economy recovers.
The CPI broke above the BoE's 2% target for the first time in almost two years in May, but its rise is expected to be much less sharp than in the United States.
Data published on Tuesday showed U.S. consumer prices rose by 5.4% in the 12 months to June, speeding up from 5.0% in May, and the Federal Reserve said last week that its top officials agreed they should be poised to act if inflation risks build.
Wednesday's figures for Britain from the ONS showed fuel prices in June were 20.3% higher than a year earlier, the biggest rise since May 2010.
Prices paid by manufacturers for their inputs rose by 9.1% in the 12 months to June, while the prices they charged rose by 4.3%.
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