The UK hit a new 40-years high inflation of 10%! Soar in bread and milk prices

Updated on August 17, 2022 16:50 PM by Anna P

Since 1982 for the first time in the last month, the United Kingdom has had high inflation. According to data released by the National Bureau of Statistics, annual consumer price inflation reached 10.1% in July from 9.4% in June.

Food inflation is now running at the highest level in 14 years. In the annual inflation rate, all eleven food and non-alcoholic beverage classes contributed upward to the change.

Higher than expected

The consumer price index was up 0.6% in July, and there was no change a year ago. The upward contribution came from bread, cereals, milk, cheese, and eggs, with notable price increases in cheddar cheese and yogurts. Rising airfare and higher gasoline and diesel prices are also to blame.

The UK economy may already entered a recession will keep the pressure on the Bank of England to follow last month's biggest increase in interest rates in 27 years with further hikes on household budgets and signs.

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The situation is miserable

Between April and June, the official labor market report found that paychecks rose by 4.7%, where the incomes fell by 3% during inflation, and there was the biggest drop in real wages. Wages are not rising enough to offset surging inflation, but they are rising fast for the Bank of England to return inflation to target.

This year the inflation is even higher, and there was also a further rise in energy bills in October. Electricity prices have risen by 54%, and gas prices have risen by 95.7% in the 12 months to July 2022. All these are because of rocketing wholesale costs worsened by Russia's invasion of Ukraine in late February.

UK government officials are examining options to provide support to households. In early September, Liz Truss, the frontrunner to succeed Boris Johnson as the next UK Prime Minister, had a detailed plan beyond promising tax.