Inflation hits double figures soaring to new 40-year high as cost of living crisis deepens | Business News

Inflation hits double figures soaring to new 40-year high as cost of living crisis deepens | Business News

By Steve Heldon

Britain’s rate of inflation has surged to a fresh 40-year high, heaping yet more pain on cash-strapped households as the cost of living crisis deepens.

The Consumer Prices Index (CPI) rose to 10.1% in the 12 months to July, up from 9.4% in June and remaining at the highest level since February 1982, the Office for National Statistics (ONS) said.

Rising food prices was the biggest driver to the latest hike, according to the ONS.

July’s inflation rate is higher than the 9.8% figure expected by most economists and represents a further squeeze on people’s pockets.

What must happen for prices to return to normal? Your cost of living questions answered

It comes after separate data released on Tuesday showed workers had suffered a record real-term wage slump in the face of spiralling prices.

Millions of public sector employees are expected to vote on strike action over pay this autumn in what could be the biggest wave of industrial action since the 1970s.

The inflation figure will ramp up pressure on the government to take further action to tackle the cost of living crunch as the Tory leadership contest continues.

Boris Johnson‘s spokesperson has said no further interventions will be forthcoming before 5 September, when either Rishi Sunak or Liz Truss will become the new prime minister, despite Labour leader Sir Keir Starmer having put forward his own “radical” package of measures he says would help families cope this winter.

Responding to the hike in inflation, Chancellor Nadhim Zahawi said: “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 £37bn 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.”

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.”

Source: Healthy Duck.

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