Inflation across OECD countries surges to 34-year high of 10.3%

Headline rate represents sharpest price increase across industrialised countries since June 1988

A motorist pumps petrol at a US fuel station. Energy price inflation across the OECD jumped to 40.7 per cent year on year in June 2022, up from 35.4 per cent in May. Photograph: Joseph Prezioso/Getty

Inflation across the industrialised world surged to a 34-year high of 10.3 per cent in June as higher energy and food prices continued to erode living standards.

The latest figures from the Organisation for Economic Co-operation and Development (OECD) suggest year-on-year inflation as measured by the consumer price index (CPI) rose to 10.3 per cent in June, compared with 9.7 per cent in May 2022. This represented the sharpest price increase since June 1988, the OECD said.

Consumer prices here rose by an average of 9.1 per cent in the 12 months to June — the fastest rate of price growth seen in the Irish economy since 1984 — and up from 7.8 per cent in the year to May.

Food and energy continue to be the main drivers.


Food price inflation in the OECD rose to 13.3 per cent in June 2022, compared with 12.6 per cent in May, the strongest food price increase since July 1975. Energy price inflation jumped to 40.7 per cent year on year in June 2022, up from 35.4 per cent in May. Excluding food and energy, year-on-year inflation increased to 6.7 per cent in June 2022, compared with 6.4 per cent in May 2022.

About a third of OECD countries recorded double-digit inflation, with the highest rate recorded in Turkey (78.6 per cent). By contrast, the lowest rate was recorded in Japan (2.4 per cent).

In the euro area, headline year-on-year inflation as measured by the harmonised index of consumer prices (HICP) rose to 8.6 per cent in June 2022, compared with 8.1 per cent in May 2022.

Strong increases between May and June 2022 were recorded in both food and energy price inflation. Eurostat’s flash estimate for the euro area in July 2022 points to a further increase in year-on-year inflation (to 8.9 per cent), while inflation excluding food and energy increased to 4 per cent, compared with 3.7 per cent in June 2022.

Separately the British pound nudged higher against the euro on Wednesday as investor focus remained on the Bank of England policy meeting on Thursday, at which the central bank is expected to raise rates for the sixth consecutive time.

Money markets are currently pricing in a greater than 90 per cent chance of an outsize 50 basis point rate hike at Thursday’s meeting, according to Refinitiv data, as the central bank attempts to cool inflation from a four-decade high of 9.4 per cent.

More than 70 per cent of 65 analysts and economists surveyed by Reuters also expect a half-point increase from the bank’s monetary policy committee this week, a poll conducted between July 27th and August 1st found. — Additional reporting: Reuters

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times