London Daily

Focus on the big picture.
Tuesday, Jun 23, 2026

UK inflation rises to 9.1%, its highest rate in 40 years

UK inflation rises to 9.1%, its highest rate in 40 years

Headline CPI rate will add to cost of living crisis, fuelled by rises in food and transport costs

UK inflation has increased to 9.1%, its highest rate in 40 years amid record prices for petrol and the soaring cost of food.

The figures from the Office for National Statistics showed an increase in May from 9% in April, as measured by the consumer price index, in a reading that matched the forecasts of City economists. In a fresh high, the headline inflation rate has hit a level not seen since February 1982, piling pressure on households in the cost of living crisis.

Inflation is being fuelled by food and non-alcoholic drink prices, which are rising at the fastest annual rate since 2009, the ONS said, with the most dramatic increases seen in the cost of bread, cereals and meat.

Soaring prices for petrol and diesel also drove up inflation in May, adding to the pressure on motorists and business costs with a 32.8% jump motor fuels over the past year – the biggest annual increase on records dating back to 1989.


ONS said the retail price index, which tends to swing higher than CPI, rose 11.7% in May.

Last week, the Bank of England said inflation was on track to reach 11% later this year amid soaring gas and electricity prices. Wednesday’s data will be seized on by rail unions who are locked in a bitter dispute with ministers over pay, as they push for wages to keep pace with the cost of living.

Millions of commuters were forced to stay home or struggle through traffic to work on Wednesday during a second day of rail strikes, in the biggest coordinated industrial action on British trains since the 1980s. The country is bracing for a wave of disruption, with unions representing teachers and Royal Mail staff announcing this week they were considering taking industrial action over pay.

Boris Johnson has warned workers against pushing for bigger wage increases to prevent a “wage-price spiral” from taking hold that would keep inflation persistently high for longer.

However, the government has decided to allow pensioners a full inflation-linked increase, by restoring the pensions triple lock. In a move design to appeal to the Tory base – pensioners tend to be more likely to vote for the Conservatives – Simon Clarke, the chief secretary to the Treasury, confirmed that pensions would increase in line with September’s CPI. The policy is likely to deliver a double-digit increase in the state pension.

Jim O’Neill, a former Treasury minister under the Tories, said it was“ludicrous” to be protecting pensioner incomes when younger people’s wages were being eroded, and criticised the government’s lack of economic policy in the face of soaring inflation.

Lord O’Neill, a crossbench peer who is now helping with a business policy review for Labour, said the government did not have a “clear and articulate policy framework” for its economic programme.

Asked on the BBC’s Radio 4 Today programme why pensions were rising in line with inflation when public sector pay was not, he said: “I have
no idea. iI seems to me pensioners, given the pressure on fiscal policies and inequalities, the constant protection of pensioners seems ludicrous in itself and in these circumstances particularly crazy.”

Unions argue that companies raising their prices is responsible for pushing the inflation rate higher.

Sharon Graham, the general secretary of Unite, said: “Runaway profits are driving the inflation that is threatening a national pay cut and yet the vast majority of politicians remain silent.”

Rachel Reeves, the shadow chancellor, said: “Though rapid inflation is pushing family finances to the brink, the low wage spiral faced by many in Britain isn’t new. Over the last decade, Tory mismanagement of our economy has meant living standards and real wages have failed to grow.”

The latest figures from the ONS showed the price of goods leaving factory gates rose at the fastest rate in 45 years, driven by widespread food price rises, while the cost of raw materials surged at the fastest rate on record.

Prices for furniture, household equipment and maintenance rose by 11%, the biggest annual increase since 2006.

Economists said inflation would rise further in the coming months, fuelled by fresh records for petrol and diesel in June, and that rising food prices would hurt the poorest families because they spent a larger proportion of their income on essentials than wealthy households did.

Jack Leslie, senior economist at the Resolution Foundation, said poorer families were already experiencing personal inflation rates in the double digits. “The latest inflation is worryingly high, but will feel low for consumers as it predates the big spike in petrol prices over the past month.”

The chancellor, Rishi Sunak, said the government was using all the tools at its disposal to bring inflation down and combat rising prices. “I know that people are worried about the rising cost of living, which is why we have taken targeted action to help families, getting £1,200 to the 8 million most vulnerable households,” he said.

Dominic Raab, the deputy prime minister, defended the government’s stance on public sector pay, saying raising wages could lead to a “vicious cycle of inflation”. He said it was right to hold against higher wages for rail workers, who are striking this week over pay and redundancies, saying the government must not give in to “militant unions”.

Defending the decision to raise pensions in line with inflation, Raab said: “[Pensioners] are particularly vulnerable and they are disproportionately affected by the increase in energy costs which we know everyone is facing.”

Newsletter

Related Articles

0:00
0:00
Close
UK Heatwave Disrupts Transport, Healthcare and Public Services as Red Weather Alerts Expand Nationwide
Barclays Warns of Growing Cyber Risk Divide Between Large UK Firms and Micro Businesses
European Defence Plans Including Ukraine Integration Prompt UK Strategic Reassessment
UK Equity Markets React as US–Iran Peace Roadmap Eases Oil Price Pressures
United Kingdom Expands Global Clean Energy Partnerships With Brazil, Morocco and Tanzania
Lord David Frost Urges Incoming UK Leadership to Abandon EU Regulatory Reset Strategy
Housing Groups Support Amendment to Strengthen Fire and Gas Safety Access Powers in Social Housing
South London NHS Estates Staff Ballot on Industrial Action Over Pay Structures in Hospital Maintenance Services
United Kingdom Government Invests £60 Million in AI Research Labs at Oxford and University College London
Barclays Cyber Security Report Highlights Rising Threat Exposure Among UK Small Businesses in AI-Driven Attacks
UK Met Office Heatwave Triggers Transport Warnings as Rail Operators Urge Cancellations Amid Infrastructure Strain
South London NHS Estates Workers Ballot for Strike Action Over Pay Disputes Across Major London Hospitals
Barclays Warns of Severe Cyber Security Gap Between Large Corporations and Small Businesses in the United Kingdom
United Kingdom Government Allocates £60 Million for Artificial Intelligence Research Laboratories at Oxford and UCL
National Health Service Approves Teplizumab Treatment to Delay Onset of Type One Diabetes in First European Rollout
Met Office Issues Rare Red Extreme Heat Warning Across London, South East and West Midlands as Transport and Health Systems Face Disruption
Prime Minister Keir Starmer Resigns After Labour Party Revolt Following Economic Stagnation and Local Election Losses
United Kingdom Economy Contracts for Second Consecutive Month as Private Sector Weakens and Job Loss Fears Rise
Taxpayer Support Grows for Higher Digital Levies on Multinational Tech Companies
Bank of England Signals Caution Over Inflation Despite Easing Energy Prices
Lloyds Banking Group Expands Artificial Intelligence Hiring Amid Sector-Wide Automation Shift
Film Producer Corporate Collapse Leaves Creditors Facing Unrecoverable Losses
UK Ten-Year Brexit Anniversary Highlights Ongoing Political and Economic Uncertainty
Nottingham Maternity Scandal Inquiry Reveals Systemic Failings in NHS Care
Met Office Heatwave Prompts Public Health Warnings Across United Kingdom
Concerns Rise Over Fiscal Stability as Political Uncertainty Weighs on UK Borrowing Costs
UK Taxpayers Back Higher Digital Taxes on Global Technology Firms, Survey Shows
Bank of England Holds Interest Rates Steady Amid Persistent Services Inflation
Reform UK and Opposition Leaders Call for General Election Following Starmer’s Departure
Ten Years After Brexit Referendum, UK Faces Ongoing Political Fragmentation and Economic Debate
Nottingham University Hospitals Maternity Inquiry Exposes Severe NHS Failures
Met Office Issues Heat Health Alerts as United Kingdom Faces Record-Breaking Temperatures
Andy Burnham Emerges as Front-Runner for Labour Leadership After Starmer’s Resignation
Keir Starmer Resigns as UK Enters New Phase of Political Leadership Transition
UK Expands Alcohol Ban Enforcement Using Tagging Technology Ahead of World Cup
UK Invests £50 Million in Critical Minerals Supply Chain Security
UK Appoints Special Envoy on Preventing Sexual Violence in Conflict
UK Introduces Fines for Landlords of Unsafe Rental Properties
Reform UK Leads Opinion Polls as Immigration Debate Reshapes UK Politics
Police Investigate Edinburgh Attacks as Potential Hate Crimes
King Charles to Publish Personal Tax and Royal Household Financial Records
Nottingham University Hospitals Maternity Inquiry Report Set for Publication
Heat-Health Alerts Issued Across London and Southern England Amid Rising Temperatures
UK Economy Shows Pressure From Middle East Conflict Despite Modest Growth
Brexit Anniversary Reignites Debate Over UK Economic and Political Direction
UK Parliament Continues Legislative Work Amid Leadership Transition
Financial Markets Hold Steady After UK Leadership Shake-Up
Andy Burnham Enters Labour Leadership Race With Strong Parliamentary Backing
Keir Starmer Resigns as UK Prime Minister After Two Years in Office
Reform UK MP Lee Anderson to Raise Pension Concerns Over British Coal Staff Superannuation Scheme
×