Inflation Highest For 40 Years As 9 percent reached and going higher

18th May 2022

The Office for National Statistics has publish a range of reports today showing the extent of inflation that has already reached 9% and showing several signs it will go higher and soon pass the 10% level. some commentators are already saying this could knock the economy into a recession. At the same time unemployment is at record lows with vacancies now at the highest level ever at 1.3 million across the UK. The problem for families is that pay levels are not keeping up with the increased cost of living. With another huge rise in energy bills coming in October on top of the April increase the government is under pressure to do something to help.

Some of the drivers for the increase include energy and fuel prices with prices affected by the Ukraine war.

Food prices are rapidly increasing also caused by the Ukraine war and sanctions Russia.

Products derived from oil are showing increases not seen for 40 years.

Producer price inflation, UK: April 2022

1.Main points
The headline rate of output prices showed positive growth of 14.0% on the year to April 2022, up from 11.9% in March 2022; this is the highest the rate has been since July 2008.

The headline rate of input prices showed positive growth of 18.6% on the year to April 2022, which is unchanged from March 2022; this is the highest the rate has been since records began.

Food products, and metals and non-metallic minerals provided the largest upward contributions to the annual rates of output and input inflation, respectively.

Producer price inflation (PPI) output prices
On the month, the rate of output inflation was 2.3% in April 2022, up from 1.9% in March 2022.

Of the 10 product groups, nine showed upward contributions to the annual rate in April 2022. Food products provided the largest upward contribution of 3.05 percentage points to the annual rate (Figure 2) and had annual price growth of 8.8% in April 2022 (Table 2). This is the highest the annual rate has been for food products since September 2011 and was mainly driven by preserved meat and meat products for domestic market.

The annual rate of output inflation increased by 2.1 percentage points from 11.9% in March 2022 to 14.0% in April 2022.

Of the 10 product groups, nine showed upward contributions to the change in the annual rate, with petroleum products and food products providing the largest, at 0.74 and 0.42 percentage points, respectively.

The monthly rate of 17.4% for petroleum products between March 2022 and April 2022 is higher than the 1.1% between the same months a year ago; this has pulled the annual rate up by 25.7 percentage points from 59.4% in March 2022 to 85.1% in April 2022

Despite providing a downward contribution to the annual rate, the annual rate for tobacco and alcohol products increased by 1.4% between March 2022 and April 2022.

Read the full report HERE