The inflation rate in England hit a new 40-year high of 10.1% in July as food and energy prices
continue to spiral upwards.
The Consumer Price Index’s annualized reading of 10.1% was above the consensus forecast of
economists who were calling for July inflation of 9.8%. July’s number was up from 9.4% in June.
Core inflation, which excludes volatile food and energy prices, came in at 6.2% for July, up from
5.8% in June and ahead of projections of 5.9%.
Rising food prices had the biggest impact on the annual inflation rate, according to the Office for
National Statistics.
The last time inflation was this high in the United Kingdom was January 1982, when consumer
prices gained 11% on an annualized basis.
The Bank of England has executed six consecutive interest rate hikes to try and lower inflation.
The central bank forecasts that the United Kingdom will enter its longest recession since the
2008-09 financial crisis in the fourth quarter of this year.
The Bank of England also forecasts that inflation will peak at 13.3% in October of this year.
Wages in the United Kingdom fell by 3% in the second quarter of the year, according to data
from the Office for National Statistics, which is the sharpest decline on record.
Despite average pay increasing by nearly 5% this year, the cost of living is outpacing wage
growth and squeezing household incomes.
