British inflation rose to a new 40-year high in July on rising food prices, official data showed on Wednesday, contributing to a cost-of-living crisis as the country faces the prospect of a recession.
The consumer price index (CPI) rose to 10.1 percent last month from 9.4 percent in June — then a 40-year record — the Office for National Statistics said.
The Bank of England warned earlier this month that inflation will rise to just over 13 percent this year, the highest level since 1980.
The country was also forecast to enter a recession that would last until the end of 2023, with official data last week showing the UK economy contracted in the second quarter.
“I understand that times are tough and people are worried about price increases that countries around the world are facing,” Finance Minister Nadhim Zahawi said after the release of the latest inflation data.
“Getting inflation under control is my top priority, and we are taking action through strong, independent monetary policies, responsible tax and spending decisions, and reforms to boost productivity and growth,” Zahawi said.
He said the Government is “helping where we can” through its £37bn support package.
The UK is facing a cost of living crisis, with wage values falling at record speed.
The deteriorating economy will be inherited by Prime Minister Boris Johnson’s successor after he leaves office next month, with two Conservatives Liz Truss and Rishi Sunak vying to take the reins.
The central bank raised its key interest rate by 0.50 percentage point to 1.75 percent at its last monetary policy meeting, the largest hike since 1995.
The BoE’s move mirrors the aggressive monetary policies of the US Federal Reserve and European Central Bank over the past month as the world struggles to cool red-hot inflation fueled by Russia’s invasion of Ukraine.
– bread, cereal, toilet paper –
The UK Statistics Office said the “biggest moves” in the CPI in July came from food.
Bread and cereals were the top contributors to food price increases, followed by milk, cheese and eggs.
The increases were reflected in higher takeaway prices, ONS chief economist Grant Fitzner said.
“Price increases on other staples such as pet food, toilet paper, toothbrushes and deodorants also pushed up inflation in July,” he added.
Package tour and airfare prices have also increased due to higher demand, Fitzner said.
The cost of raw materials and goods leaving factories continued to rise.
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