WAR could push prices still higher, economists warned as Britain’s inflation rate rose higher than expected last month.

The consumer price index rose by 3.4 per cent in May, slightly above forecasts. This was the same as revised figures recorded in April.

But there are fears that higher oil and gas prices resulting from Israel’s attack on Iran could push up the cost of living still further.

The retail prices index (RPI) rate of inflation fell to 4.3 per cent from 4.4 per cent.

Food prices are already rising fast, impacting heavily on family budgets.

TUC general secretary Paul Nowak called for a cut in interest rates to help working people.

“As the international picture gets more turbulent with every passing day, global uncertainty alongside increased energy and water costs are keeping prices high,” he said.  

“High interest rates just make cost pressures worse and are not the answer to stubborn inflation. 

"Instead, lower rates are needed to help ease the pressure on households, businesses and government borrowing.

“The Bank of England must do the right thing and resume cutting interest rates this week.

“This will put more money in people’s pockets, enhance businesses’ ability to grow, and make sure our public services can thrive."

Chancellor Rachel Reeves acknowledged that there was “more to do” to bring prices down. 

She said: “We took the necessary choices to stabilise the public finances and get inflation under control after the double-digit increases we saw under the previous government, but we know there’s more to do.

“Last week we extended the £3 bus fare cap, funded free school meals for over half a million more children and are delivering our plans for free breakfast clubs for every child in the country.”

Fears are now focused on the escalating conflict in the Middle East cause by Israel’s attack on Iran, which may well drive up oil prices over a prolonged period. 

The price of Brent crude has already risen to a four-month high since the aggression.

Laith Khalaf, head of investment analysis at AJ Bell, said: “The escalation of conflict in the Middle East has bumped up the oil price, which will put upward pressure on inflation if sustained.”

Despite the TUC’s plea, the Bank of England is expected to keep UK rates the same, at 4.25 per cent, when it makes the next announcement today.