In March, the inflation was “only” 7%. In addition to the surge in energy, the National Statistics Office also points to the jump in metals and chemicals.
The inflation rate jumped to 9% in April year-on-year in the UK, a 40-year high, mainly due to energy prices, which is expected to increase the cost of living crisis.
This is a very strong monthly surge compared to the end of March (7%), according to the monthly report published on Wednesday by the National Statistics Office (ONS).
Prices in April were driven up “by a sharp rise in electricity and gas prices” due to an increase in the price cap, commented Grant Fitzner, an ONS economist.
“Steep year-over-year increases in the cost of metals, chemicals and crude oil have also continued,” driving higher prices for products leaving the factory, he adds.
Finance Minister Rishi Sunak argued in a statement that “countries around the world are facing rising inflation” and that April’s inflation in the UK came from energy, boosted by prices on the global markets.
“We cannot fully protect people from these global challenges but are providing significant support where we can, and we stand ready to do more,” he added.
Critics are mounting in the face of government action considered insufficient in the face of the cost of living crisis, while millions of Britons must now restrict their meals or their heating.
On Monday, the Governor of the Bank of England (BoE) had described the situation as “apocalyptic” for food prices and warned that inflation, which had gone to exceed 10% this year in the United Kingdom, might rise even higher. if Ukraine, a major wheat producer in particular, fails to export its crops.
BoE officials estimate that “80%” of inflation was due to rising energy prices, boosted by Russia’s invasion of Ukraine.
The remaining 20% can be explained in particular by a very tight labor market in the United Kingdom, particularly in the wake of Brexit.
The United Kingdom is particularly dependent on gas in its energy mix, and therefore vulnerable to the surge in world hydrocarbon prices, compared to other countries such as France, which draws its electricity largely from nuclear power.
EU governments have also better protected households from the rise than the British government, argues Paul Dales, of Capital Economics, interviewed by AFP.
“Enormous concerns”
Finance chief for the opposition Labor Party, Rachel Reeves, said the surge in prices was creating “huge concerns for families with budgets already under pressure”.
“We can no longer wait for this government, out of touch with reality, to act”, she added, affirming that her party would try to pass an “emergency budget and a plan for growth”.
The director of the British Food and Drink Federation (FDF), Karen Betts, for her part, insisted on “the immense pressures” on companies in the sector with ingredient costs “constantly rising for a year due to global supply chain congestion due to the pandemic.
The invasion of Ukraine by Russia “has aggravated the situation”, these two countries being important exporters of wheat, edible oils, energy and fertilizers”, she continues.
According to the daily The Times, Rishi Sunak is preparing a plan to increase reductions on heating bills as well as tax cuts. Spokespersons for the British Treasury did not immediately respond to requests for comment from AFP.
On Tuesday, the ONS unveiled Britain’s lowest unemployment rate since 1974 at 3.7%, but warned that runaway inflation was eating up real wages.
The surge in prices should lead the BoE to raise its key rate further, currently at 1%, which should weigh on growth.
Activity entered negative territory in March and the BoE projects a contraction in the economy next year.
The International Monetary Fund (IMF) has meanwhile sharply lowered its growth forecast for the UK, and expects the UK economy to lag behind the G7 next year.
