Official figures show that inflation in the UK reached 10.1% in July, the highest in 40 years.
According to data released Wednesday, National Statistics Office The Consumer Price Index (CPI) rose 10.1% year-on-year in July, up from 9.4% in June, according to the (ONS).
The indicator was expected to reach 9.8%, according to an average of analyst estimates calculated by Pantheon Macroeconomics.
According to ONS estimates, it’s the biggest rise in the cost of living since February 1982, when the CPI hit 10.4%.
CPI, which includes owner’s cost of housing (CPIH), jumped 8.8% in the 12 months from 8.2 in June to July.
According to the ONS, higher food prices are the largest contributors to monthly changes in both CPI and CPIH, and the largest contributors to annual CPIH inflation are energy prices, owner-resident housing costs, (OOH), motor fuels and food.
Food and non-alcoholic beverage prices rose 12.7%, up from 9.8% in the previous month and the highest since August 2008, according to the ONS.
ONS chief economist Grant Fitzner said inflation was driven by “broad price increases”.
“Food prices have risen significantly, especially bakery products, dairy products, meat and vegetables, which has also been reflected in higher takeaway prices,” he said.
“Rising prices for other essentials such as pet food, toilet paper, toothbrushes and deodorants also pushed inflation higher in July.
Prices for packaged vacations and airline tickets have also risen due to higher demand, said Fitzner. continued,” he added.
according to OECD figuresthe UK’s CPI in July was the highest among G7 countries, higher than most Western EU countries but lower than Eastern EU countries.
It is expected to drop slightly in August. However, estimates suggest it could soar to 13.3% in October when the energy price cap is raised again.
The UK energy regulator, the Office of Gas and Electricity Markets (Ofgem), previously announced that the price cap (the maximum price an energy supplier can charge per unit of energy) will be revised every three months instead of every six months. did. global energy markets.
The next change will be announced later this month and will go into effect in October.
The energy price cap, calculated based on typical annual energy consumption, could rise to £3,639 annually in October, according to the latest estimates released Wednesday by energy consultancy Auxilione. of 1,971 pounds.
The figure is estimated to continue to climb to £4,722 next January, to £5,601 in April, before falling again from July onwards.
The UK economy is estimated to have contracted by 0.1% in the second quarter of 2022. The Bank of England believes rising energy costs could push the UK into recession.
Whether the bank’s October predictions will prove true remains to be seen. The CPI forecast for July is 9.9%, 0.2 percentage points behind what the ONS is currently measuring.
Samuel Toombs, chief UK economist at Pantheon Macroeconomics, said the difference between the bank’s forecasts and measurements was largely due to higher food prices.
Finance Minister Nadim Zahawi said curbing runaway inflation was a “top priority”.
“We understand these are tough times and people are concerned about the rising prices facing countries around the world,” he said.
“There are no easy solutions, but we are doing all we can to help through our £37bn support package and will be making additional payments to the lowest income earners, pensioners and people with disabilities in the coming months. and a £400 discount on energy bills for everyone,” he said.
“Keeping inflation under control is my top priority, and I am taking action through strong and independent monetary policy, responsible tax and spending decisions, and reforms to boost productivity and growth.”
Shadow Prime Minister Rachel Reeves said: “We have to grasp the rise in inflation and the anxiety that households have about getting back on their feet.
“Labor’s all-buy plan to freeze the energy price cap will bring inflation down this winter and ease the burden on households and businesses.” 25% windfall tax on
“This means families won’t pay a cent more on their utility bills this winter,” says Reeves. “People are sick and worried, Tories are busy fighting and ignoring the scale of this crisis.”
Liz Truss, one of two candidates vying for the next Conservative Party leader and prime minister, said it was “wrong to keep putting plaster on the issue”, her priorities being tax cuts and gas. , said nuclear power, increased oil production. Other forms of renewable energy.
Truth’s opponent, Rishi Sunak, ruled out extending the windfall tax he introduced earlier this year as prime minister, saying he didn’t think it was the right approach.
PA Media contributed to this report.
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Lily Zhou is a freelance writer primarily covering British news for The Epoch Times.