UK Inflation Rate Hits 8.7% for Fourth Month in a Row, BoE Expected to Raise Interest Rates

This was driven by higher prices for flights and second-hand cars, as well as food prices.

The Bank of England is expected to raise interest rates by 0.25% to 4.75% on Thursday, with some suggesting they could go up to 5%.

However, rising rates mean homeowners are facing large increases in mortgage payments.

Inflation is being driven by rising service prices in cafes, restaurants and hotels, which is being passed on to consumers.

The UK's inflation rate is four times higher than the targeted 2% and the Bank of England has been steadily raising interest rates since the end of 2021 to curb inflation.

Food price inflation in May was 18.3%, down slightly from 19% in April.

Higher costs for ingredients, such as tomatoes (almost doubling in price), flour (rising by 60%) and cheese (jumping by 50%), have led to restaurants increasing their prices.

Food price inflation is still at a level that "causes agony at the tills." Additionally, national debt was greater than the UK's economic output for the first time since 1961.