Inflation soars to 40-year high of 10.1 percent as cost-of-living crisis continues

The figure has risen from 9.4 percent in June, the Office for National Statistics has said

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The rate of Consumer Prices Index inflation rose to 10.1 percent in July, the highest in more than 40 years and a jump from 9.4 percent in June, the Office for National Statistics (ONS) has said.

The increase was largely down to food prices and staples including toilet rolls and toothbrushes, the ONS said.

The measure had been expected to reach 9.8 percent, according to an average of analysts’ estimates calculated by Pantheon Macroeconomics.

It is the biggest jump in the cost of living since February 1982, when CPI reached 10.4 percent, according to ONS estimates.

The rate of Consumer Prices Index inflation rose to 10.1 percent in July
The rate of Consumer Prices Index inflation rose to 10.1 percent in July
Nadhim Zahawi
Nadhim Zahawi

It is also a massive jump from the 9.4 percent inflation in June.

Inflation is expected to fall back a little in August; however, according to estimates it could soar to 13.3 percent in October when the energy price cap rises again.

The Bank of England thinks this could push the UK into a recession.

ONS chief economist Grant Fitzner said: “A wide range of price rises drove inflation up again this month.

“Food prices rose notably, particularly bakery products, dairy, meat and vegetables, which was also reflected in higher takeaway prices.

“Price rises in other staple items, such as pet food, toilet rolls, toothbrushes and deodorants also pushed up inflation in July.

“Driven by higher demand, the price for package holidays rose, after falling at the same time last year, while air fares also increased.

“The cost of both raw materials and goods leaving factories continued to rise, driven by the price of metals and food respectively.”

While Chancellor Nadhim Zahawi added: “I understand that times are tough, and people are worried about increases in prices that countries around the world are facing.

“Although there are no easy solutions, we are helping where we can through a £37 billion support package, with further payments for those on the lowest incomes, pensioners and the disabled, and £400 off energy bills for everyone in the coming months.

“Getting inflation under control is my top priority, and we are taking action through strong, independent monetary policy, responsible tax and spending decisions, and reforms to boost productivity and growth.”