Official figures expected to lay bare cost-of-living squeeze facing UK households as inflation hits four-decade high
Official figures are this week expected to lay bare a cost-of-living squeeze facing UK households as inflation hits a four-decade high.
An announcement from the Office for National Statistics is expected to show on Wednesday that consumer prices rose by 9.2 per cent in June compared with the same month a year ago. That is an increase from 9.1 per cent in May.
Economists cited the continuing impact of rising food and fuel prices last month. Inflation is expected to hit 11 per cent by the autumn.
Upward trend: The Bank of England is under pressure to help cool demand and stop a spike in prices becoming entrenched
June’s inflation figures will be the last to be published before the Bank of England makes its next interest rate decision.
The Bank is under pressure to help cool demand and stop a spike in prices becoming entrenched.
Growth figures last week were better than expected – which may mean the Bank’s Monetary Policy Committee is emboldened to raise interest rates at a sharper pace.
But Sanjay Raja, chief UK economist at Deutsche Bank, said: ‘Inflation data will be of paramount importance.’ Raja said signs of accelerating wage growth or that fewer workers are available – to be covered in labour market figures due out on Tuesday – will also be closely watched.
Retail sales figures for June, due on Friday, are expected to show a 0.4 per cent month-on-month decline. That could cast a shadow over the economic picture.
Nomura’s George Buckley said households were expected to have pared back spending in the face of high inflation and low consumer confidence.