The rate of UK inflation hit a four-year high of 2.9% in May, up from its 2.7% rate the month before.
It is some way short of the Bank of England’s targeted inflation of 2% and continues its trend of steadily rising since last June’s Brexit vote.
The consumer prices index shows that inflation is rising faster than wages, which is once again putting the squeeze on household spending. Average year-on-year wage growth was recorded at 2.1% in the three months to March, which is some way short of today’s inflation rate.
Added to a weaker pound, which in turn results in higher shop prices, it means inflation is expected to rise further.
However, a spokesperson for the Treasury defended the government, telling Business Britain Media that families are being helped by maintaining low taxes, increasing the National Living Wage and putting a freeze on fuel duty.
“A typical base rate taxpayer now pays £1,000 less income tax than in 2010 and increases in the National Living Wage mean £1,400 extra a year for a worker since its introduction.”
Frances O’Grady, the General Secretary of the Trade Union Congress (TUC), said that wages need to be addressed by the government.
“The new government must stop the real wage slide. Ministers must focus on delivering better-paid jobs all around the UK.”
Elsewhere, the consumer prices index including owner occupiers’ housing costs (CPIH), showed that the 12-month rate of inflation was 2.7% in May 2017 – a slight rise from April.
Jonathan Athow, ONS Deputy National Statistician, attributed the rise on increasing prices for ‘cultural goods and services’.
“The latest rise in CPIH takes it to its highest rate since April 2012. The biggest upward factor was rising prices for recreational and cultural goods and services, particularly games, toys and hobbies.
“Meanwhile, house prices continued to rise into April, albeit at a slightly lower rate than the April 2016 average.”
Prices increased on cultural goods and services by 0.9% between April and May, which compares with an drop of 0.4% at the same time last year.
By far the largest downward contribution came from transport, with petrol and diesel prices falling this year – a far cry from the petrol price rise of 2.8% in May 2016.