London, United Kingdom, June 16 –British inflation has soared to the highest level since before the coronavirus pandemic, with clothing, fuel and oil prices rebounding as the economy reopens.
The national inflation rate has accelerated sharply since March, when the government began a phased lifting of coronavirus restrictions.
In May, the Consumer Prices Index surged to 2.1 percent, breaching the Bank of England’s target level of 2.0 percent for the first time since July 2019.
The rate compared with 1.5 percent in April, the Office for National Statistics added in a statement.
The news surprised markets because analysts’ consensus forecasts had been for an increase to 1.8 percent.
“This month’s rise was led by fuel prices which fell this time last year, but have jumped this year thanks to rising crude prices. Clothing prices also added upward pressure as the amount of discounting fell,” remarked ONS chief economist Grant Fitzner.
The BoE’s key task is to use monetary policy to keep annual inflation close to a government-set target level of 2.0 percent to preserve the value of the pound.
Although the government has eased Covid restrictions since March, this week it was forced to delay a full reopening of the economy due to the Delta variant.