What's going on?

Data out on Wednesday showed that inflation in the UK hit a 40-year high last month.

What does this mean?

This is not going to plan: the prices of UK goods and services were 9.1% higher last month than the same time last year � only a small increase from April�s 9%, sure, but proof-positive of the persistence of inflation right now. The main contributor to the uptick came from food prices, but the data was grim across the board, as prices in half of all categories measured rose by 7% or more. The worst is yet to come too, with the average price of gas � a major driver of rising prices � already up 12% this month from May. Throw in another jump in energy prices due in the fall, and traders are now betting that the Bank of England will double interest rates to 3% by the end of the year (tweet this).

Why should I care?

The bigger picture: The wage spiral in practice.
This rise in prices will only add to a cost-of-living crisis that caused railway workers to strike this week, and could cause others � namely teachers and mailmen � to do the same. But while the goal of an inflation-linked raise is an entirely fair one, it could also end up making things worse. For one, higher wages would increase company costs, and potentially encourage them to up their prices even more. And for another, they�d increase disposable income, leading to an increase in consumer demand and pushing prices higher still.

Zooming out: Brits need cheap.
The need to pinch pennies seems to have steered more shoppers toward budget clothing outlets. Primark reported this week that its revenue was 81% higher last quarter than the same time last year. The retailer also announced its first push into online shopping with a trial of a click-and-collect service � something analysts think could drive even higher footfall in its stores.