The inflation rate in the UK jumped in July to 10.1%, a 40-year high, driven by food price hikes, adding to an already severe cost of living crisis in the country. , the National Statistics Office announced on Wednesday.
Price increases were widespread last month, but “foodstuffs particularly increased, in particular bakery, dairy products, meat and vegetables”, but also “takeaway meals”, detailed Grant Fitzner, chief economist of the ONS, on Twitter.
Inflation was already at 9.4% year on year in June, and price increases might exceed 13% in October, when drastic increases in energy prices, which are also soaring, are expected, according to forecasts from the Bank of England.
In July, price increases affected basic items such as pet food, toilet paper, toothbrushes and other deodorants, but also, in the midst of school holidays, holidays and air transport , according to the ONS.
The cost of raw materials and goods leaving factories also continued to rise.
Inflation is melting the purchasing power of the British at record speed, with real wages, that is to say adjusted following price increases, which have lost 3% for the three months ended at the end of June, had announced the ONS on Tuesday.
The consequences are already being felt on the economy: British gross domestic product (GDP) contracted by 0.1% in the second quarter, before a probable entry into recession at the end of the year.
‘I understand that times are tough and people are worried regarding the price increases that countries around the world are facing,’ Finance Minister Nadhim Zahawi reacted, highlighting the £37bn support package already announced by the government.
But many voices are calling for much more to be done in the face of historic price rises, criticizing the inaction of the executive in the midst of the Conservatives’ campaign to choose the successor to resigning Prime Minister Boris Johnson.
The Bank of England, which has already raised its interest rates several times since 2021 in an attempt to calm inflation, announced in early August an increase in its key rates by half a percentage point, the largest increase since 1995.
‘The extent and depth of inflation is putting further pressure on the Bank of England’ to raise rates, said KPMG economist Yael Selfin.
/ATS
