Inflation remained at 8.7% despite expectations that it would fall, prompting calls for more employer support as the cost-of-living crisis continues.
The Office for National Statistics (ONS) revealed that consumer prices index (CPI) in the 12-month period to May 2023 showed inflation was at the same rate as it had been in April, after economists predicted a marginal drop to 8.4%.
Chieu Cao, CEO of Mintago, said: “Today’s data indicates that inflation is not falling as quickly as we would have hoped. The cost-of-living crisis in the UK rages on, which will also mean higher interest rates to come, placing even greater pressure on people’s finances.
“Behind the data is a very real, very human issue. People are struggling to make ends meet, and we cannot underestimate the impact inflation continues to have on people’s financial and mental wellbeing. We have to provide more support, and it is not just for the government to deliver this. Employers must also intervene and take action to protect their employees from financial devastation through targeted, impactful wellbeing support.
“Businesses will have their own financial challenges. But it is vital employers remember that a lack of financial support will lead to stressed, discontented employees. And frankly, that is akin to taking a wrecking ball to employee satisfaction, job performance and ultimately a business’s success.”
Air travel, recreational and cultural goods helped keep inflation high, while fuel prices dropped and the cost of food and non-alcoholic drinks rose slightly, according to ONS.
Mohsin Rashid, CEO of ZIPZERO, said: “The good news does not hide the fact that when it comes to food inflation we are at the top of a very big peak, and we are limping back to the bottom. Meanwhile, core inflation remains sticky, raising concerns over how entrenched it is within the UK economy. Expect higher interest rates tomorrow. And expect Britons to keep the purse strings tight for still some time, with a savvy marshalling of financial resources and an emphasis on money-saving techniques like loyalty and reward schemes to remain of utmost importance.”
TUC general secretary Paul Nowak added: “After more than a decade of pay stagnation, working people are still getting poorer every month. Wage rises aren’t causing inflation, real pay is still lagging far behind where it needs to be even to get living standards back to where they were over a decade ago.
“Pushing interest rates so high that the economy is driven into recession will only make the current crisis worse. What working people need is a credible plan for sustainable growth, to get living standards and public finances back on track.”