Consumer price inflation, driven by higher food prices, rose from 9.4 percent in June to its highest level since February 1982. The double-digit rate beat economists’ expectations that the rate would rise to 9.8 percent one hundred. With broad-based price increases across the UK economy in July, resulting in inflation higher than in other G7 countries, Wednesday’s data underlined the difficult task the Bank of England faces in bringing down inflation. The Office for National Statistics said the rise in prices in July — 0.6 per cent in the month alone — was unusual because prices generally fall in July at a time of high sales. Inflation last month was at the highest rate for any July since comparable monthly readings began in 1988, the statistics office added. Grant Fitzner, chief economist at the ONS, said “a broad range of price rises drove inflation up again this month”. He noted that bread, dairy products, meat and vegetables were the products that contributed the most to the increase in inflation. a negative effect was the higher prices for takeaways. With chaos at airports and a limited supply of flights, the price of package holidays has also risen much faster this year than in 2021. Food price inflation reached 12.7% in July, the highest rate in the category in more than 20 years. The core rate of CPI inflation, excluding energy and food prices, also beat expectations in July, rising 6.2 percent, versus economists’ expectations for a 5.8 percent rate. Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said this reflected “short-term momentum” in price rises rather than the price declines of a year ago. While all advanced economies have seen inflation rise, it has been stronger in the UK than in other G7 countries and most European nations. That reflects the country’s greater use of natural gas, underlying strong spending growth last year, private sector wage growth of more than 5 percent and the ease with which companies expect to pass higher costs on to customers. Many economists said on Wednesday that the uptick in inflation – along with strong wage growth in the second quarter – would harden the Bank of England’s resolve, encouraging the central bank to raise interest rates further and faster.

Luke Bartholomew, senior economist at Abrdn, said: “Given the strength of underlying inflationary pressure, we continue to expect the Bank[of England] achieve another rate hike of 0.5% at its next meeting.” With the BoE likely to raise interest rates, pressures on households will increase in the autumn as energy prices are set to jump again in October, although there has been some relief as a result of lower petrol costs this month. The BoE expects the inflation rate to rise to more than 13% in the final quarter of this year and remain high through most of 2023. Separate ONS analysis showed that poorer households faced higher rates of inflation than those on higher incomes because they spent more of their budgets on energy and food, which were rising in price faster. The hit to household living standards will have its impact on economic growth, economists said. Jamie O’Halloran at Pro Bono Economics, an organization that advises the charity sector, said the rapid rise in prices “has led to a punishing cost of living crisis, with the threat of recession looming ever closer”.