Inflation in the UK has risen above 10% for the second time this year as households come under pressure from the biggest annual rise in food prices for more than 40 years amid the economic crisis. cost of living
The Office for National Statistics (ONS) said the consumer price index rose to 10.1% in September, returning to double digits after a slight fall to 9.9% in august The last figure was higher in 1982. City economists had forecast a slightly smaller rise of up to 10%.
Rising food and drink prices were the main driver of the latest cost of living rise, with an annual rise of almost 15%, the fastest annual jump since April 1980, as the price of bread and cereals, meat, milk, cheese and eggs skyrocketed.
The September inflation figure is crucial as it is used to revalue pensions and benefits. However, there have been suggestions that the new chancellor, Jeremy Hunt, will break the Tory party’s manifesto commitment to the triple lock – the guarantee that state pensions rise each year in line with inflation, average wage growth or 2.5%, whichever is higher. – so they may not end up increasing by 10.1%.
Darren Morgan, head of economic statistics at the ONS, said: “After last month’s small fall, headline inflation returned to its peak seen at the start of the summer. The rise was driven by further increases of food, which saw its biggest annual increase in more than 40 years, while hotel prices also rose after falling at this time last year.”
Large price increases for a broad basket of goods and services were partially offset by a continued decline in gasoline prices, as well as a steeper-than-usual decline in airline tickets for the time of the year
The ONS said the costs faced by businesses were also beginning to rise more slowly, reflecting an overall fall in crude oil prices in September.
The figures come as households come under pressure from rising mortgage costs amid a Bank of England interest rate hike and a sharp rise in UK government bond prices triggered by the month’s mini-budget past
In response to financial market turmoil, Hunt this week made a U-turn to reverse most of the unfunded tax cuts in Kwasi Kwarteng’s mini-budget and dramatically reduced the length of the price freeze government energy from two years to just six months. .
Hunt said he understood households across the country were struggling with higher prices and rising energy bills. “This government will prioritize help for the most vulnerable while delivering broader economic stability and driving long-term growth that helps everyone.”
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According to the latest snapshot from the ONS, the price of electricity rose by 54% and gas by 95.7% in the year to September. It said it was considering whether cutting the length of the government’s energy price freeze would affect the headline rate of inflation and would make an announcement on October 31, the same day as the plan to cut debt of Hunt.
Rachel Reeves, Labour’s shadow chancellor, said the latest figures showed the government had lost control of the economy amid a crisis of its own. “It is clear that the damage is done. This is a Tory crisis, made in Downing Street and paid for by working people.
“The facts speak for themselves. Mortgage costs are rising. Borrowing costs have increased. Low standard of living. And we are forecast to have the lowest growth in the G7 over the next two years.”