Britain’s inflation rate rose to the highest level in 40 years last month as Russia's war in Ukraine fueled further increases in food and fuel prices.
Consumer price inflation accelerated to 9% in the 12 months through April, from 7% the previous month, the Office for National Statistics (ONS) said Wednesday.
That is the highest rate since sometime in 1982, when inflation reached 11%, according to statistical modeling by the ONS.
Millions of households across Britain were hit with a 54% jump in gas and electricity bills last month after regulators boosted the energy price cap to reflect previous increases in wholesale prices.
Britain is facing a "very, very difficult economic situation," British Foreign Secretary Liz Truss said on Wednesday.
"We are in a very, very difficult economic situation," Truss told Sky News. "We're facing some very, very serious global headwinds. And as you said, inflation is extremely high."
The figures will increase pressure on the government to mitigate a cost-of-living crisis that economists forecast will produce the biggest drop in living standards since the 1950s.
The government may cut income taxes and is drawing up plans to boost subsidies for low-income people struggling to pay fuel bills, British media reported Wednesday. It is also considering a windfall profits tax on energy companies benefiting from high oil and gas prices.
Britain now has the highest inflation rate of Europe's five biggest economies and almost certainly the G-7 countries, with Canada and Japan yet to report figures for April. Neither is likely to match Britain's price growth.
"We cannot protect people completely from these global challenges but are providing significant support where we can, and stand ready to take further action," Finance Minister Rishi Sunak said.
Sterling fell after the data and was down 0.6% against the dollar at 8:16 a.m. GMT.
Soaring energy bills were the biggest inflation driver, reflecting last month's increase in regulated energy tariffs. Knock-on effects from Russia's invasion of Ukraine mean those bills are likely to jump higher again in October.
Anti-poverty campaigners called on Sunak to act now, starting with an immediate increase in the value of welfare benefits to match inflation.
"As the price of essentials like food and energy continue to soar, the Chancellor's (finance minister's) inaction will make an already desperate situation for many even worse," Rebecca McDonald, senior economist at the Joseph Rowntree Foundation which campaigns on behalf of lower-income households, said.
A survey published on Tuesday showed two in three people in Britain had kept their heating off when they would normally have turned it on, almost half were driving less or changing supermarkets and just over a quarter say they have skipped meals.
Food prices rose by nearly 7% in the 12 months to April, the ONS said.
On Monday, Bank of England (BoE) Governor Andrew Bailey, speaking to lawmakers, said food price rises were a major worry as he apologized for "being apocalyptic for a moment."
While the government has said it now has a 22 billion-pound ($27.4 billion) package of support for households, much of this is canceled out by the effect of recent tax increases on workers.
An increase in prices charged by restaurants and cafes, as value-added tax rates went back to their pre-pandemic levels in April, also added to the inflation jump last month.
Worse to come
The BoE this month forecast inflation would top 10% later this year and investors expect it will add to the four interest rate increases it has implemented since December and which have taken its Bank Rate to 1%, its highest since 2009.
"Things are going to get worse before they get better," said Paul Dales, chief U.K. economist at Capital Economics consultancy of Wednesday's data.
Retail price inflation – an older measure that the ONS says is now inaccurate, but which is widely used in commercial contracts and to set interest payments on inflation-linked government bonds – jumped to 11.1% last month, also the highest since 1982.
There were signs of further inflation pressure ahead as manufacturers suffered the joint biggest increase on record in the prices they pay for their raw materials, which were up by an annual 18.6%, matching March's high.
Factories increased their prices by 14% over the 12 months to April, the biggest jump since July 2008.