THE SNP have slammed the Tories for prioritising their leadership contest over the cost-of-living as inflation surged to a 40-year high.
Official data showed that Consumer Prices Index (CPI) inflation rose to 9.4% in June, up from 9.1% in May and remaining at the highest level since February 1982.
And June’s inflation rate was higher than the 9.3% expected by most economists and heaps yet further pain on cash-strapped households and businesses as the cost-of-living crisis intensifies.
Meanwhile, the SNP have accused the Tories of paying more attention to in-fighting than the cost-of-living crisis as the party’s leadership race is set to be narrowed down to two contenders on Wednesday afternoon.
SNP treasury spokesperson Alison Thewliss said: “The UK Government is distracted by internal power struggles within the Tory Party, and ordinary people are bearing the brunt of their infighting. Westminster has made its priorities clear - Scotland would be much better off without it with independence.
“What we know about high inflation is that it doesn’t affect everyone equally. People at the lower end of the income scale are less likely to have had pay rises to match inflation, as well as being disproportionately affected by price increases.”
She added: “Businesses are also impacted by soaring prices of raw materials and fuel, which will have a knock-on effect on consumer confidence. UK government inaction risks exacerbating poverty and creating a deep recession which could take years to recover from.”
After being cut from the Tory leadership race, Chancellor Nadhim has pledged to get inflation under control.
Zahawi said: “Countries around the world are battling higher prices and I know how difficult that is for people right here in the UK, so we are working alongside the Bank of England to bear down on inflation.”
In a speech in London on Tuesday evening, Andrew Bailey, the governor of the Bank of England, said a bigger 50 basis percentage point rise – which would take rates from 1.25% to 1.75% – will be one of the options on the table at the next Bank meeting as it looks to “act forcefully” on inflation.
The data from the Office for National Statistics (ONS) revealed that the cost of motor fuels jumped by 42.3% in the 12 months to June – the biggest leap since records began.
Average petrol prices stood at 184p a litre last month, up 18.1p since May alone, while diesel raced 12.7p higher to 192.4p a litre, which was also a record.
People across the UK are also being hit by sharply higher grocery bills, with food and non-alcoholic drink prices having risen by 9.8% in the year to June 2022 – the highest rate since March 2009.
Food prices lifted 1.2% month on month in June, which follows similar increases in April and May as higher cost pressures and the impact of the Ukraine war filter down to the supermarket shelves.
Grant Fitzner, chief economist at the ONS, said: “Annual inflation again rose to stand at its highest rate for over 40 years.
“The increase was driven by rising fuel and food prices; these were only slightly offset by falling second-hand car prices.”
The ONS said the largest upward effect came from essentials such as milk, cheese and eggs, but big price rises were also seen for vegetables, meat and other food products, such as ready meals.
It comes on top of eye-watering gas and electricity tariff increases, with the annual inflation rate standing at a record 70.2% and with further rises to come.
Ofcom’s next review of the energy price cap is expected to push inflation above 11% in the autumn, which will only partially be offset by the Government’s £400 discount to gas and electricity bills and £650 one-off support payment for vulnerable households.
Yael Selfin, chief economist at KPMG, said: “The peak in inflation is still some way off, and is not expected to return to the 2% target before mid-2024.
“This means more pain is on the way for household budgets as the high rate of inflation continues to outpace wage growth, bringing down the real value of incomes across the UK.”
The ONS figures also show that the CPIH, which includes owner-occupiers’ housing costs and is the ONS’s preferred measure of inflation, rose by 8.2% in June, up from 7.9% in May.
The Retail Prices Index (RPI) rose from 11.7% in May to 11.8% in June.
