Inflation in the UK climbed to a new 40-year high with the Consumer Price Index (CPI) reaching 10.1 percent in July.
This is after inflation peaked at 9.4 percent in June, confirmed by the Office for National Statistics (ONS).
The rise in inflation intensified largely due to increase in food prices, household spending, including surge in market prices of electricity, gas and petrol.
Commenting on the rising inflation, Chancellor Nadhim Zahawi said: “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 grow.”
Alongside soaring energy prices in Europe and the Ukraine-Russia conflict, inflation has been on the rise ever since the world markets reopened post pandemic.
According to the Bank of England, inflation is expected to peak at 13.3 percent this year pushing UK into a recession.
Earlier this year, Bank of England hiked interest rates by 0.5 percent to 1.75 percent – the highest rate since 2009 to abate the rise in inflation.
Highest since 1982, the surging inflation can mean increase in cost of living, with concerns that low-income residents will be unable to afford to heat their homes this winter.
International Monetary Fund (IMF) has cited high inflation among the reasons for slower world economic growth. The ONS data showed July’s Retail Price Index inflation was 12.3 percent — up from 11.8 percent the previous month and the highest since January 1982.
Financial markets are betting that bank rate will need to reach 3 percent by the middle of next year to tame inflation.
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