LONDON: The UK has the highest inflation rate among the world’s top economies, in the latest sign the Brexit vote is contributing to a squeeze on living standards. The increased cost of importing food and fuel is pushing prices to rise at a faster rate than anywhere in the G7 group of leading global economies, according to the Organisation for Economic Co-operation and Development. The UK is only behind Turkey, Mexico and the eastern European states of Latvia and Estonia in the club of 35 developed nations. The annual growth in prices in the UK jumped to 2.9% in August from 2.6% in July, equalling a four-year high in the consumer price index (CPI) reached in May earlier this year. That outstrips the average 2.2% growth in prices across the OECD for the same month.
The UK ranked top for inflation among the G7, whose other members are the US, Canada, France, Germany, Italy and Japan. The rise in prices was also above the averages for the euro area, the wider European Union and the G20 nations. Turkey had the highest inflation rate at 10.7%, followed by Mexico at 6.7%. Israel was the only country to record falling prices, at -0.1%. Major central banks around the world target an inflation rate of 2% to encourage their economies to expand at a sustainable pace. The Paris-based organisation found energy price inflation accelerated to 5.9% in the year to August, compared with 3.7% in July. Food price inflation also rose, albeit at a slower pace, to 1.8% in August, compared with 1.7% in July.
