Inflation is at its highest level in four decades, with the Office for National Statistics (ONS) announcing it had hit 9.4% in the 12 months to June. Rising food and petrol prices have driven inflation to the highest level since 1982.
The rate of inflation is a percentage that shows how much the cost of living has increased over a period of time. This is most commonly measured yearly, with a 12-month or annual inflation rate comparing prices for the latest month with the same month a year ago, the ONS explains.
The main measure of inflation is the consumer prices index (CPI), which measures the prices of around 700 essential items and services across retailers and suppliers. The prices of items in this “shopping basket” are then compared with the same items 12 months ago to calculate the rate of inflation.
