Soaring food and energy prices push UK inflation above 10%

Annual inflation in the UK consumer prices reached double digits, rising to 10.1% in July from a year ago. This is his steepest rise since 1982.The UK is seeing consumer prices rise even faster than theUS. and in Europe, food and energy costs are rising.

The UK consumer price index rose above analysts' expectations of 9.8%, up from an annualized rate of 9.4% in June, the Office for National Statistics (ONS) said Wednesday. The increase was largely due to higher prices for food and basic necessities such as toilet paper and toothbrushes.

Core inflation, which excludes volatile food and energy prices, also beat analyst forecasts, reaching 6.2% in July. 

“As expected, food was the main driver of inflation, but the drivers were spread across a wide range of categories such as clothing, rent and travel. [And] transportation services are also putting significant upward pressure on both core and headlines.

Teenage Inflation Expectations

The Bank of England has said higher natural gas prices will likely push consumer prices to 13.3% in October, while the ONS said wages in the UK were likely to rise given inflation.

These pressures persuaded banks to raise key rates by 0.5% this month, in the sixth straight hike since December. The interest rate is currently at 1.75%, the highest since the deepening of the global financial crisis at the end of 2008.

is expected,” said developed markets economist James Smith. and ING Economics. "I'm not ruling out another rate hike in November."

Inflation has soared in many countries as Russia's war in Ukraine has caused unprecedented energy price increases around the world. In retaliation for Western aid to Ukraine, Russia is cutting natural gas shipments to Europe and jeopardizing the fossil fuels that power factories and heat homes in the winter.

Gas problems are threatening a recession in the 19 countries that share the euro currency, with inflation reaching a record high of 8.9% in July. Two-quarters of her economies are already shrinking in the US, fueling fears of a recession. US inflation eased somewhat to her 8.5% in July, but is still close to a 40-year high.

Stimulus Payments

"We understand these are tough times and people are concerned about the rising prices facing countries around the world," he said. said UK Treasury Secretary Nadim Zahawy.

"There are no easy solutions, but we are doing all we can to help," he said, adding that he is offering his £400 (483 $) payments.

The UK's Conservative government is under pressure to do more to help people cope with the cost of living crisis. Average household fuel bills in the UK have risen by more than 50% this year, with further hikes due in October, and he expects average annual bills to reach £3,500 ($4,300). increase.

Prime Minister Boris Johnson is set to step down next month, saying the new measures must be left to his successor. His successor, Foreign Secretary Liz Truss, has opposed major intervention, saying she favors tax cuts over "subsidies."

Another candidate, former Treasury Secretary Rishi Sunak, introduced a 25% contingent tax on oil and gas company profits in May. This is expected to raise billions of pounds to help pay people whose utility bills are rising. Opposition politicians want the tax to extend to power companies — Truss is adamant that he doesn't think profit is a dirty word.

In:
• Boris Johnson
• Economy
• Gas Prices
• Inflation
• UK