Inflation in the UK reaches its highest level in 40 years at 10.1%!

According to the Office for National Statistics (ONS), the consumer price index has reached double digits in the United Kingdom, with inflation hitting its highest level in 40 years. The ONS revealed on August 17 that the consumer price index rose by 10.1 percent annually in the 12 months to July 2022.

The figure represents a significant jump from the 9.4 percent recorded in June and exceeds the forecast of 9.8 percent. The ONS attributed the historic increase to higher prices for housing and household services such as fuel, food and drink.

UK inflation hits 40-year high as food price rises intensify

According to the ONS, rising food prices are the latest contributor to the UK’s highest and most alarming inflation rate. On the other hand, core inflation was 6.2% in the 12 months to July 2022. This is up from 5.8 percent in June and up from 5.9 percent expected.

PwC’s director of retail strategy, Kien Tan, spoke on the historic spike in UK inflation. Tan stated:

“Supermarkets have had no choice but to pass on price increases from suppliers, who themselves are facing unprecedented inflation in raw material and ingredient costs. This has been particularly acute in labor- and utility-intensive categories like dairy, with reports that the price of a pint of milk has more than doubled in the same stores since the beginning of the year.”

According to the ONS, the modeled indicative estimates of consumer price inflation “suggest that the CPI rate would last have been higher around 1982, when estimates range from nearly 11 percent in January to about 6.5 percent in December.“

Predictions of a higher inflation rate

The Human Rights Foundation’s director of strategy, Alex Gladstein, also has something to say about the situation. He says the UK has joined a long list of countries experiencing double-digit price increases. Coin Bureau suggested in a tweet that the worst is yet to come. It wrote that “winter gas surges haven’t even started yet“.

UK CPI inflation at 10.1% in July. Nothing quite like double digit inflation 💀

And the winter gas surcharges haven’t even begun yet.

– Coin Bureau (@coinbureau) August 17, 2022

Britons are in fear with uncertainties about the future of inflation in the UK. Capital Economics’ chief British economist, Paul Dales, said in July that inflation could reach 12 percent in October. He also mentioned that interest rates could rise from 1.25 percent to 3 percent,”although it is very difficult to know whether they will rise by 25 or 50 basis points in August“.

Meanwhile, the Bank of England expects U.K. inflation to rise above the current all-time high to 13.3 percent in October.