UK tobacco prices 'almost double Europe's' Signs of a squeeze on household incomes were evident this week as figures - also from the ONS - revealed that inflation rose from 2.4pc to 2.7pc last month. Inflation was mainly pushed up by rising transport costs. Tobacco and alcohol prices also rose last month. Wages have been rising far more slowly than prices, fuelling concerns about consumer spending. But, there have been signs that consumers are more willing to dip into their pockets. Figures out this week showed that retail sales in Britain jumped by a better-than-expected 2.1pc month-on-month in May. The total amount spent rose to £27.1bn, a record for the month of May. However, much of that rise was driven by a rise in promotions as supermarkets battled to win customers with discounts and price-match schemes.