Inflation hits double figures
It's reached a new 40-year high
Last updated 17th Aug 2022
Inflation has hit double figures as the cost of living soared again in July, putting even more pressure on already cash-strapped families in the UK.
Consumer Prices Index inflation (CPI) reached 10.1% last month, beating expectations, the Office for National Statistics (ONS) revealed.
That's a new 40-year high.
The increase was largely down to food prices and staples including toilet rolls and toothbrushes, the ONS said.
The measure had been expected to reach 9.8%, according to an average of analysts’ estimates calculated by Pantheon Macroeconomics.
It is the biggest jump in the cost of living since February 1982, when CPI reached 10.4%, according to ONS estimates.
It is also a massive jump from the 9.4% inflation in June.
Inflation is expected to fall back a little in August; however, according to estimates it could soar to 13.3% in October when the energy price cap rises again.
The Bank of England thinks this could push the UK into a recession.
Chancellor of the Exchequer Nadhim Zahawi said: “I understand that times are tough, and people are worried about increases in prices that countries around the world are facing.
“Although there are no easy solutions, we are helping where we can through a £37 billion support package, with further payments for those on the lowest incomes, pensioners and the disabled, and £400 off energy bills for everyone in the coming months.
“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 growth.”
What do small businesses think?
Jenny Blyth, owner of London-based Storm In A Teacup Gifts: "The current economic climate is like nothing we’ve ever seen. The pandemic was hard and the unknown was terrifying but we persevered, stood together and made it work.
"The cost of living crisis is like living life on a financial knife edge in constant fear of falling.
"We cannot live like this, we simply won’t survive."
Elizabeth McQuillan, a central Scotland-based artisan jeweller at Boho Silver: "How can it be that a ‘first world’ country is in such a mess, with families unable to thrive and feed their kids without the support of food banks and charities?
"And that’s before inflation goes really crazy. As a tiny artisan jewellery business, the increased costs for precious metals, packaging and postage along with general running costs are untenable without increasing our prices or working for peanuts."
Helen Skripek, founder of the Derby-based caterer, The Butlers Pantry: "Cooking on Gas' now ignites pound signs, not progress.
"As a catering company, we've found ourselves constantly juggling plates, and unfortunately we have had no choice but to increase our prices and delivery costs.
"We really didn't anticipate that the aftermath of the pandemic would be quite so challenging. Let's hope that the new Prime Minister looks into a financial package to help hospitality with continuing rising costs in fuel, food and energy."