British consumer price inflation increased to 10.1% in July, its highest level since February 1982, up from a yearly rate of 9.4% in June, according to official data released on Wednesday. This increased pressure on households.
The increase exceeded everyone’s predictions in a Reuters poll for inflation to increase to 9.8% in July, and it will not allay the Bank of England’s concerns that price pressures may become entrenched.
The BoE increased its benchmark interest rate by 0.5% to 1.75 earlier this month, marking the first such increase since 1995. The BoE also predicted that inflation would peak in October, when household energy prices are next scheduled to increase, at 13.3%.
According to data released by the Office for National Statistics on Wednesday, prices increased 0.6% from June to July on a non-seasonally adjusted basis, and the annual rate of inflation for retail prices reached 12.3%, the highest level since March 1981.
Finance Minister Nadhim Zahawi responded to the figures by saying, ‘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 grow.’
Rising energy costs in Europe as a result of Russia’s invasion of Ukraine are the primary cause of inflation and, according to the BoE, are likely to push Britain into a protracted, if shallow, recession later this year.
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