UK inflation up to 2.5%, highest rate since 2018

15:02, 14 July 2021
UK inflation up to 2.5%, highest rate since 2018

British inflation hit 2.5% level, its highest since August 2018 and above the Bank of England (BoE) expectations, and up from 2.1% in May due to higher prices for food, fuel, second-hand cars, clothing, and footwear, Office for National Statistics data showed on Wednesday.

Economists forecasted consumer price inflation (CPI) to hit 2.2% in the 12 months to June.

The BoE expects inflation to peak further above 3% as a temporary move after Britain bounces back from its coronavirus lockdowns.

Among the reasons thought to be UK's businesses shut down due to COVID-19 spread, stay-at-home order, and global oil prices that climbed up.

Fuel prices in June in the UK were 20.3% higher than a year earlier, the biggest rise since May 2010.

In the US consumer prices rose by 5.4% in the 12 months to June, speeding up from 5.0% in May, the most considerable jump in annual inflation data in 13 years, the CPI data presented by BLS showed. The highest increase affected American gas prices which bounced by 45.1% last year and used cars that rose by 45.2% over the 12 months and precisely 10.5% in June.

The economists of the US Federal Reserve believe that the pace of inflation will slow down, but if prices continue to exceed forecasts, the US Central Bank may increase interest rates in order to calm the economy.