The Consumer Price Index (CPI) reached a ten-year high of 3.8% in June from 3.3% in May, according to the Office for National Statistics.
Soaring food and drink prices were mainly to blame for the rise with prices up by a record 2.1% while increasing fuel costs also played their part.
The inflation figure is now way above the 2% target and supports the Bank of England’s fears it may break through 4% this year.
CPI is now at its highest since records began in January 1997 and prior to this, it was last higher in May 1992.
The other key inflation measures are all pointing the same way with the Retail Price Index (RPI) rising to 4.6% in June from 4.3% in May.
Figures released yesterday also showed factory-gate inflation, linked to the amount manufacturers’ charge for their goods, was 10% higher last month than a year ago.
Liberal Democrat shadow chancellor, Vince Cable warned a damaging spiral of escalating prices and costs experienced in the 1970s and late 1980s could now be set in motion.
The Bank of England voted to keep interest rates at 5% last week but today’s figures will put it under more pressure to raise rates in the coming months.
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