According to the Office for National Statistics, rising food prices were the largest contributor to the most recent increase, with annual inflation for these items now standing at 12.7%, up from 9.8% in June. This increase is primarily attributable to price increases for staples such as bread, milk, cheese, and eggs.
Britain’s inflation rate has reached a new 40-year high, inflicting further hardship on cash-strapped households as the cost of living crisis worsens.
In the 12 months to July, the Consumer Price Index (CPI) climbed to 10.1%, up from 9.4% in June, and remained at its highest level since February 1982, according to the Office of National Statistics (ONS).
According to the ONS, bread, milk, cheese, and eggs were the primary contributors to the most recent price increase, with the annual inflation rate for these commodities rising to 12.7% from 9.8% in June.
The July inflation rate is greater than the 9.8% predicted by the majority of economists, putting additional pressure on people’s finances.
It follows Tuesday’s release of separate statistics indicating a record real wage decline for workers in the face of escalating prices.
In what may be the largest wave of industrial action since the 1970s, millions of public sector workers are anticipated to vote on strike action over compensation this fall.
ONS chief economist Grant Fitzner said: “Inflation rose again this month due to a wide variety of price increases.
“The increase in food prices, particularly for bakery items, dairy, meat, and vegetables, was also reflected in higher takeout pricing.
Inflation in July was also impacted by increases in the prices of pet food, toilet paper, toothbrushes, and deodorants, as well as rice.
“After declining at the same time last year due to rising demand, the price of vacation packages rose, while plane costs also increased.
“Both the price of raw materials and factory-produced commodities continued to grow, driven by the rising cost of metals and food, respectively.”
As the fight for the Tory leadership proceeds, the inflation rate will increase pressure on the government to take additional steps to combat the rising cost of living.
The spokeswoman for Boris Johnson stated that there will be no further involvement before September 5, when either Rishi Sunak or Liz Truss will become the new prime minister.
This is even though the leader of the Labour Party, Sir Keir Starmer, has proposed his own “bold” package of policies, which he claims would aid families over this winter.
Inflation is anticipated to decline somewhat in August, but it is projected to skyrocket to 13.3% in October when the energy price ceiling is once again raised.
In response to the most recent surge in inflation, Chancellor Nadhim Zahawi declared: “I recognize that circumstances are difficult and that people are concerned about price increases in countries around the world.
“Although there are no simple solutions, we are helping where we can through a £37bn support package, which includes additional payments for people with the lowest incomes, pensioners, and the disabled, as well as £400 off everyone’s energy bills over the next several months.
“My first objective is bringing inflation under control, and we’re taking action through a strong, independent monetary policy, reasonable tax and spending decisions, and measures to improve productivity and growth.”
However, his Labour opponent Rachel Reeves emphasized the need to “take control” of the situation.
She stated, “This winter, inflation will decrease due to Labour’s fully-costed plan to freeze the energy price cap, alleviating the burden on people and companies.
“And this will result in no increase in energy expenses for homes this winter.
While the Tories are busy squabbling and denying the magnitude of this problem, only Labour can provide Britain with the necessary fresh start.
In July, the Retail Price Index (RPI) inflation hit 12.3%, according to government figures.
In the past, this metric was used to determine the annual increases for certain train tickets in England.
With inflation surging, however, the UK government has stated that it will keep the 2023 increases below the RPI, without specifying by how much.
The Consumer Price Index including housing prices for owner-occupants (CPIH) increased by 8.8% in July, up from 8.2% in June.
