Between 1945/1946, Hungary was hit by the worst inflation, today in the United Kingdom we are in and moving towards the worst inflation in 40 years of British history. According to ONS, the Consumer Prices Index (CPI) rose by 9.4% in the 12 months to June 2022, up from 9.1% in May. On a monthly basis, CPI rose by 0.8% in June 2022, compared with a rise of 0.5% in June 2021 whereas the independent observers state that the Consumer Price Index for the United Kingdom is 121.8 for the month of June 2022.
What is inflation?
Inflation is the increase in the price of something over time.
For example, if a bottle of milk costs £1 and that rises by 5p compared with a year earlier, then milk inflation is 5%.
Every month a figure is released, estimating how much prices are rising overall - it's currently at 9.4%.
Why are prices rising so fast?
Many things are contributing to the high rate of inflation, including:
- Energy bills have risen rapidly because of high oil and gas prices. They're expected to increase sharply again from October
- Petrol and diesel prices have driven up. Prices recently fell from record levels but are expected to remain high
- Food prices, squeeze grain production and costs
- The cost of used cars has also risen and is contributing to inflation, the Office for National Statistics (ONS) says
- The costs of raw materials, household goods, furniture and restaurants and hotels has risen
- Higher interest rates make mortgage payments more expensive for some homeowners
The rising cost of groceries
How much have food and drink items gone up in price?
- Low-fat milk by 26.3%
- Whole Milk by 18.6%
- Bread by 9.1%
- Flour by 19.1%
- Olive oil by 18.6%
- Lamb & Goat by 14.9%
- Eggs by 11.1%
- Potato, Yogurt etc by 9% plus,
Each and everything has become expensive
What's happening to wages?
Pay increases for many people aren't keeping up with rising prices.
- Average wages, not including bonuses, rose by 4.3% between March and May, the ONS says.
- But when you take inflation into account, regular pay actually fell by 2.8% compared to 12 months ago.
- Pay including bonuses was down 0.9% when adjusted for inflation.
When will inflation come down?
Despite predicting that inflation will go higher in the autumn, the Bank of England says the "current high rates of inflation are not likely to last".
It forecasts inflation will peak this winter - then come down to close to 2% in about two years.