
The Consumer Price Index (CPI) rose again 9.1% in May, a further 0.1 percentage point increase on April’s record inflation, the Office of National Statistics (ONS) has revealed.
The continued increase in the measure of changes to typical household costs have been driven by increased prices of essential goods, such as food and drink, transport and fuel, energy bills and housing costs.
Household bills rose slightly in May 2022, reflecting more consumers having moved from fixed price deals on energy to Ofgem’s new price cap to reflect rising oil and gas prices, in part due to the ongoing Russian invasion of Ukraine. The latest inflation figures have also seen motor fuel prices rise 32.8% in the past year.
The conflict in Ukraine has also been attributed to some of the rises in food prices that have also been a key factor in the rise in the CPI. The bread and cereals, and oil and fats categories have seen some of the largest price rises from April to May 2022, as Ukraine is a major exporter of both wheat and sunflower oil
While the rate of inflation increase appears to have levelled off, with just a 0.1 percentage point increase on the previous month’s figures, the Bank of England’s economists have warned that the peak is still ahead of us and inflation is set to reach double figures by the end of the year.
The CPI has now been above the Bank of England’s 2% inflation target for 12 months, and the continued pressure on household finances has seen 60% of adults report to the ONS that they have cut back on non-essential spending as a result of rising prices of essentials.
Responding to the latest inflation figures, Anna Leach, CBI Deputy Chief Economist, called for increased support for businesses to absorb a downturn in consumer spending:
“Inflation has picked up again, and we expect it to stay elevated over the year ahead, particularly as global price pressures remain strong. The result will be much pain for those businesses most exposed to higher costs, and a historic squeeze on households’ incomes.
“The void left by falling household spending must be filled by government action to shore up both near and long-term economic growth. Committing to a permanent successor to the superdeduction, as well as supporting green infrastructure and technologies that help cut energy bills in homes and businesses, will both boost economic confidence and reduce exposure to volatile global energy prices.”