UK consumer prices continued to rise in July, 10.1% increase It’s the fastest pace since 1982.
Rising food prices pushed inflation into double digits for the first time in 40 years. Inflation rose higher than economists had expected, up 0.6% from the previous month, the National Bureau of Statistics said Wednesday.
Food prices rose 2.3% from June to July, the highest monthly increase since 2001, according to the Bureau of Statistics. The prices of staple foods such as bread, cereals, milk, cheese and eggs have increased significantly.
Inflation is still months away from its expected peak and isn’t expected until the fall when the cap on home energy bills resets. At that point, the economy could enter a prolonged recession as high energy prices lead to lower consumption activity and business restraints, according to Bank of England projections.
But the ever-rising rate of inflation is sounding a growing alarm about the cost of living crisis as prices of more commodities, including basic goods and services, rise. Energy charges could reach £3,500 (about $4,240), three times what they were a year ago. Meanwhile, the central bank is raising interest rates to keep spending down as it tries to deal with inflation, which has now reached five times his target.
Wages are growing rapidly, twice as fast as they averaged in the decade before the pandemic, but they still cannot keep up with prices. Adjusted for inflation, wages, excluding bonuses, fell 3% in the second quarter compared to the same period last year, the Bureau of Statistics said on Tuesday. It was a record drop.