Annual shopper value inflation hit 10.1% in July, based on knowledge revealed by the Office for National Statistics on Wednesday, up from 9.4% in June. Soaring meals prices — up 12.7% since July 2021 — have been the most important single contributor to the acceleration in inflation, the ONS stated.
The headline inflation quantity was larger than predicted by a Reuters ballot of economists, and meals inflation is now working at its highest degree in 14 years.
“All the eleven food and non-alcoholic beverage classes made upward contributions to the change in the annual inflation rate, where prices overall rose this year but fell a year ago,” the ONS stated.
The largest upward contributions got here from bread and cereals, and from milk, cheese and eggs, with notable value will increase in cheddar cheese and yoghurts.
On a month-to-month foundation, the patron value index was up 0.6% in July, in contrast with no change a yr in the past. Higher gasoline and diesel prices, along with rising air fares, have been additionally guilty, the ONS added.
Data revealed final week confirmed that the nation’s GDP dropped by 0.1% within the second quarter of this yr.
And Tuesday’s official labor market report discovered that paychecks rose by 4.7% between April and June, that means common incomes fell by 3% throughout the interval as soon as inflation is taken under consideration — the most important drop in actual wages for the reason that ONS started preserving data greater than 20 years in the past.
Inflation is forecast to go even larger later this yr, pushed by additional rises in regulated power payments in October. Electricity prices have already risen by 54% and gasoline prices by 95.7% within the 12 months to July 2022 due to rocketing wholesale prices, worsened by Russia’s invasion of Ukraine in late February.
UK authorities officers are reportedly inspecting choices to supply extra help to households. But Liz Truss, frontrunner to succeed Boris Johnson as subsequent UK prime minister in early September, has but to set out an in depth plan past promising tax cuts.
The opposition Labour Party is looking for a windfall tax on UK oil and gasoline firms to be prolonged to assist fund a freeze in family heating payments this winter.
— Anna Cooban and Rob North contributed to this text.