UK Inflation at New High in More Than 40 Years

The cost of living in the United Kingdom rose further in May to a new high in more than 40 years. British inflation stood at 9.1 percent in May, reports the British statistics office.


Inflation was already 9 percent in April, marking the sharpest increase in consumer prices since 1982.

As in many other European countries, the prices of fuel, electricity and food in the United Kingdom, in particular, rose again last month. The situation is expected to get even worse.

The Bank of England expects inflation to rise further to just over 11 percent this year, partly as a result of the more expensive energy contracts that many Britons will have to deal with.

The British central bank raised interest rates for the fifth time in a row last week and policymakers said they would continue to take strong action to fight inflation. By raising interest rates, borrowing money becomes more expensive and less money is available, which should push prices down.

Higher interest rates fight inflation but also curb economic growth.

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