Inflation hits 40-year high of 9%

Inflation reaches its highest level in 40 years as the cost of living problem worsens.

Last month, the rate jumped to 9%, the highest level since similar figures from 1982.

The Office for National Statistics (ONS) reported a broad-based increase in prices for ordinary goods and services in April.

There was an unprecedented 54 percent increase in the energy price cap kicking in at the beginning of the month accounting for over three-quarters of the increase.

Other key reasons included the highest gasoline and fuel prices on record.

As the immediate effects of Russia’s war in Ukraine seeped through to places like petrol forecourts, the main consumer prices index (CPI) gauge was at 7% in March.

It came on top of current inflation brought on by the relaxation of COVID-19 limits, which saw demand far outpace supply around the world.

“Inflation climbed significantly in April, led by the sharp rise in electricity and gas costs as the higher price cap came into force,” said ONS chief economist Grant Fitzner.

“Around three-quarters of the increase in the annual rate this month came from utility bills.”

“Steep annual rises in the cost of metals, chemicals and crude oil also continued, along with higher prices for goods leaving factory gates. This was driven by increases for food products, transport equipment and metals, machinery and equipment,” he added.

Rising factory gate costs are a major indicator of future inflation, and it was revealed separately on Wednesday that gasoline and diesel prices had set new records in the previous 24 hours, at 167.64p and 180.88p per liter, respectively.

Rising factory gate costs are a major indicator of future inflation.

It was revealed separately that gasoline and diesel prices had set new records in the previous 24 hours, at 167.64p and 180.88p per liter, respectively.

This meant that the chancellor’s fuel duty decrease had been reversed in just 55 days.

The price cap system saved UK consumers from the worst of the increase in wholesale gas costs, which began last summer, because it is now modified only twice a year – though this is set to change.

The Bank of England upgraded its estimates earlier this month.

It predicted that inflation will reach 10% later this year, with food prices projected to rise even further due to critical supplies of wheat being held up in war-torn Ukraine.

It has warned that the stress could lead to a recession and an increase in unemployment.