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United Kingdom: Inflation hits new 40-year high in June

UK inflation hit a new 40-year high in June as energy and food prices continued to soar, escalating the country’s historic cost of living crisis.

The consumer price index came in at 9.4% on an annual basis, according to estimates, slightly higher than Reuters estimates and up from 9.1% in May.

The bigger-than-estimated rise means Britain had the highest rate of inflation in June among the G7, although much smaller EU states are showing higher price rises.

The monthly rise came in at 0.8%, beating the previous month’s 0.7% but lower than April’s 2.5%.

The biggest contributors to the rise in inflation came from motor fuel and food, with prices for the former rising 42.3% year-on-year, the highest level since records began in 1989.

The Bank of England has raised borrowing costs since December as it tries to stop rising inflation from taking hold in the British economy, and is expected to raise them again on August 4, after the next meeting.

Investors expect the BoE to raise interest rates to 1.75% from 1.25% a month ago.

Core inflation in June eased to 5.8% from 5.9% in May, in line with estimates.

Source: Capital

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