Prices are rising in the UK at the highest rate in decades as households' finances continue to be squeezed. Energy, fuel and food costs are among the biggest contributors to inflation at present.
Average electricity prices jumped by 54% in April, while some petrol stations are now charging more than £2 per litre. The Bank of England has said rising global food prices are a "major worry".
But how does inflation in the UK compare with the economies of our neighbours in the European Union? The chart below compares the data.
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How does inflation in the UK compare with the EU?
Inflation can be measured in several ways. We have chosen to use the Consumer Prices Index including owner occupiers' housing costs (CPIH), which the Office for National Statistics ( ONS ) calls the “most comprehensive” indicator of the changing cost of living.
In addition to tracking the percentage change in the price of a set basket of goods and services consumed by households, CPIH includes a measure of the costs associated with owning, maintaining and living in one’s own home. Annual rates up to May 2022 – or the nearest available month – have been used to compare the UK against the EU’s 22 member states that are also part of the Organisation for Economic Cooperation and Development (OECD) global policy forum.
The largest upward contributions to the UK’s annual CPIH rate came from housing and energy costs (2.97 percentage points) and transport (1.50 percentage points), according to the ONS. It rose by 7.9% in the year to May, the highest it has been since April 1991.
Based on OECD figures, the UK’s annual inflation rate to May is lower than the EU’s average rate of 10.3%. Our CPIH is similar to the rates of Ireland, Germany and Portugal – 7.8%, 7.9% and 8.0% respectively.
France has the lowest inflation rate of the group, measured at 5.2%. Stabilising services inflation and a fall in manufactured goods inflation have contributed to the figure, according to financial services company ING.
Latvia, Lithuania and Estonia have experienced the fastest inflation in the EU over the past 12 months, with the latter's inflation rate at 20.0%. The Baltic states have seen energy prices soar following sanctions imposed on Russia over its invasion of Ukraine.
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