UK inflation rises again to 40-year excessive of 10.1%

Inflation returned to a 40-year excessive final month of 10.1 per cent after meals costs soared.

The speed of Shopper Worth Index inflation rose to 10.1 per cent in September from 9.9 per cent in August, the Workplace for Nationwide Statistics has mentioned.

Inflation was barely greater than economists had anticipated. They’d predicted a determine of 10 per cent.

It matches the 40-year excessive inflation charge hit in July and stays effectively above the federal government’s goal of two per cent.

Rising meals costs had been the biggest contributor to hovering inflation between August and September, the ONS mentioned.

Over the previous yr as much as September 2022, the rising value of housing and family companies has been the primary driver of accelerating costs.

Responding to the figures, chancellor Jeremy Hunt mentioned that the federal government “will prioritise assist for probably the most susceptible whereas delivering wider financial stability.”

However his Labour counterpart Rachel Reeves mentioned that the figures would deliver extra anxiousness to households.

“It’s clear that the injury has been executed. It is a Tory disaster, made in Downing Avenue and paid for by working folks,” she mentioned.

“Mortgage prices are hovering, borrowing prices are up, residing requirements down and we’re forecast to have the bottom progress within the G7 over the subsequent two years,” Ms Reeves added.

The patron worth index charge of inflation for meals and non-alcoholic drinks reached a 40-year excessive of 14.6 per cent in September. This was up from 13.1 per cent in August.

The annual charge of inflation for this class has continued to rise for the final 14 consecutive months, from destructive 0.6 per cent in July 2021.

The present charge of meals inflation is estimated to be the very best since April 1980.

The rise in meals costs was pushed by the rising value of bread, cereals, meat merchandise, milk, cheese and eggs.

The annual inflation charge of transport was 10.9 per cent in September 2022, down for a 3rd month in a row from a peak of 15.2 per cent in June this yr, the ONS mentioned.

ONS director of financial statistics Darren Morgan mentioned: “After final month’s small fall, headline inflation returned to its excessive seen earlier in the summertime.

“The rise was pushed by additional will increase throughout meals, which noticed its largest annual rise in over 40 years, whereas resort costs additionally elevated after falling this time final yr.

“These rises had been partially offset by persevering with falls within the prices of petrol, with airline costs falling by greater than normal for this time of yr and second-hand automobile costs additionally rising much less steeply than the massive will increase seen final yr.

“Whereas nonetheless at a traditionally excessive charge, the prices dealing with companies are starting to rise extra slowly, with crude oil costs really falling in September.”

The principal economist on the Confederation of British Trade, Martin Sartorius, mentioned that rising inflation underlined the necessity for presidency to present extra particulars on its revised power help bundle.

“Inflation returned to its latest 40-year excessive and is predicted to develop additional in October as power payments rise consistent with the federal government’s power worth assure.

“The prospect of family power payments rising sharply once more in April 2023 emphasises the necessity for presidency to set out the small print of any future focused help sooner moderately than later, along with how the nation will set up its longer-term power safety.”