The cost of living soared once more in July with Britain’s inflation rate reaching a new 40-year high, putting more strain on families throughout the UK. The Consumer Price Index inflation (CPI) reached 10.1% in July, up from 9.4% in June, as highlighted by the Office for National Statistics (ONS).
This increase in inflation marks the largest spike in the cost of living since February 1982, when CPI reached 10.4%, based on ONS estimates. July’s inflation rate is higher than the 9.8% figure that was expected by most economists.
Inflation is anticipated to fall back slightly in August, although it is estimated that it might go up again up to 13.3% in October when the energy price cap surges. The Bank of England is convinced that this may push the United Kingdom into a recession.
Why Has UK Inflation Surged?
The measure has been expected to reach 9.8%, based on an average of analysts’ estimates calculated by Pantheon Macroeconomics. This increase was majorly down to food prices and staples including toilet rolls and toothbrushes, based on the ONS.
ONS chief economist, Grant Fitzner, stated:
Buy Crypto Now“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 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.”
Times Are Tough
The increase in inflation comes after different data released on August 16 showed workers had suffered a record real-term pay slump as prices of basic commodities sky-rocketed. The most recent inflation figure will increase the pressure on the government to take action in combating the cost of living crisis.
While responding to the surge, Chancellor Nadhim Zahawi stated:
“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.”
