UK's inflation rate reaches a 40-year high as energy bill soars

LONDON: The Consumer Prices Index (CPI) in the United Kingdom increased by 9% in the year to April 2022, reaching its highest level since 1982, according to the British Office for National Statistics (ONS).

"Inflation climbed sharply in April, led by the substantial rise in electricity and gas prices as the higher price cap took effect," said ONS Chief Economist Grant Fitzner on Wednesday, adding that utility bills accounted for around three-quarters of the increase in the annual rate in April. According to sources, the ONS also released new modelled historical figures on Wednesday, indicating that CPI annual inflation was last higher 40 years ago.

The skyrocketing energy bill comes after the Office of Gas and Electricity Markets (Ofgem) in the United Kingdom raised the ceiling on April 1.  The new cap is being driven by a historic surge in worldwide gas prices, with "wholesale prices quadrupling in the last year," according to the Ofgem.

According to the ONS, the increase resulted in 12-month electricity and gas inflation rates of 53.5 percent and 95.5 percent, respectively, compared to 19.2 percent and 28.3 percent in March.

In April, average petrol and diesel prices were also the highest on record. The 12-month rate for vehicle fuels and lubricants was 31.4 percent, the highest since the ONS began compiling historical data in January 1989.

The Resolution Foundation, an independent think tank in the United Kingdom, has urged the British government to provide more assistance to low-income families. According to their calculations, inflation for the poorest households was even higher, at 10.2 percent.

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