UK inflation hits new 40-year high of 9.1% as food and energy price surge persists

More than four in five people in the U.K. are worried about rising living costs and their ability to afford basics necessities like food and energy over the coming months, according to a new survey.

The UK inflation rate was 9.1% in May, as soaring food and energy prices continued to deepen the country's cost-of-living crisis.

The 9.1% increase in the consumer price index was in line with expectations and slightly higher than the 9% increase recorded in April.

Consumer prices rose by 0.7% month-on-month in May, slightly above expectations for a 0.6% rise but well short of the 2.5% monthly increase in April.

The U.K.'s Office for National Statistics said in its communications on Wednesday that it believed inflation would have been higher around 1982.

Electricity, gas, and other fuels, along with transport, were the biggest contributors to the inflation rate.

In the 12 months to May, the consumer prices index increased from 7.8% to 7.9%.

The largest upward contribution to the change in the 12-month inflation rates between April and May was due to rising prices for food and non-alcoholic beverages.

The Bank of England implemented a fifth consecutive hike to interest rates last week but stopped short of the aggressive hikes seen in the U.S. and Switzerland.

The main bank rate is currently at a 13-year high and is expected to go up by October.

The U.K.'s energy regulator increased the household energy price cap by 50% from April 1 to cope with a surge in wholesale energy prices, including a record rise in gas prices, and has not ruled out further increases to the cap at its periodic reviews this year.

Cost-of-living crisis

Wednesday's inflation print was a reminder of the challenges facing the central bank, government, businesses and consumers.

The Bank of England is stuck between a rock and a hard place because of the cost of living crisis.

The Bank of England is trying not to tip the economy into recession at a time when businesses and consumers are feeling the pinch.

He said that the Bank's current strategy is not doing enough to stop inflation from running away and that the Bank will have to raise rates soon.

According to a recent survey, a quarter of Britons have stopped eating meals because of inflation and a food crisis.

Along with the shocks facing the global economy, the U.K. is also facing domestic pressures.

There are signs of a tightening of labor market conditions and inflation in the broader economy, according to economists. The labor market in the U.K. is worse than it was in the 70s, according to Christopher Pissarides.

The government and the central bank will be keeping a close eye on the labor market, not just for signs of further strikes over inflation-lagging wage rises.

Any sign of weakness in the employment market will be a big warning sign for the economy.