UK inflation rose above 10% for the second time this year as households come under pressure from the biggest annual rise in food prices in more than 40 years amid the cost of living crisis.
The Office for National Statistics (ONS) said the Consumer Price Index rose to 10.1% in September, returning to double digits after a slight decline. to 9.9% in August. The number was last higher in 1982. City economists expected a slightly lower rise to 10%.
The surge in food and beverage prices has been the biggest driver behind the latest cost-of-living increase, with an annual rise of nearly 15%, the fastest annual jump since April 1980, as the prices of bread, cereals, meat, milk, cheese and eggs rose. They shot.
The inflation number for September is critical because it is the number used to raise pensions and retirement benefits for the following April. However, there have been suggestions that the new chancellor, Jeremy Hunt, I will break The Conservative Party’s commitment to the triple lock – ensuring state pensions rise each year in line with inflation, average wage growth, or 2.5%, whichever is higher.
Charities have warned that failure to achieve an increase in benefits to match inflation, after the largest devaluation in real terms for 50 years earlier this year, would lead to an increase in poverty.
“It is morally indefensible that the government is still considering leaving people with less ability to pay what they need,” said Rebecca MacDonald, chief economist at the Joseph Rowntree charity.
The government is believed to be considering raising pensions and benefits in line with wage growth of 5.5%, saving around £8 billion next year to the Treasury, following Hunt. He said decisions were needed “as hard as tears”. To balance books after mini budget fails.
The Resolution Foundation said such a shift would have dire consequences for families struggling with the rising cost of living. One disabled adult on universal credit loses £380, a single parent with one child loses £478, and a working couple with three children loses £978.
Jack Leslie, chief economist at the think tank, said: “While the Treasury’s large savings may seem tempting in the context of its attempts to bridge the financial gap, the cost to 10 million working-age families and nearly every retiree will be huge.”
According to the latest snapshot from ONS, consumers have experienced price increases across a wide range of goods and services, including from hotel accommodations, furniture, and household goods such as washing machines, electric fans and vacuum cleaners.
The large price increases were partially offset by persistently low gasoline prices, as well as sharper-than-normal drops for airline tickets for that time of year.
The costs facing companies also began to rise more slowly, the Office for National Statistics said, reflecting a global drop in crude oil prices in September.
These figures come as households are under pressure from mortgage-cost inflation amid rising interest rates from the Bank of England and a sharp rise in UK government bond prices caused by last month’s mini-budget.
The central bank is expected to raise interest rates further from the current level of 2.25% as it tries to bring down inflation, despite the rising risks of a recession as rising costs of living force families to rein in their spending.
Al Diwan said electricity prices rose 54% and gas prices 95.7% in the year to September. Statisticians will consider whether Reducing the length of the government’s energy price guarantee It will affect the main rate of inflation, and will make an announcement on October 31 – the same day as Hunt’s debt-reduction plan.
Labor shadow adviser Rachel Reeves said the latest figures show the government has lost control of the economy amid a crisis of its own making. Clearly, the damage has been done. “This is a Tory crisis, made in Downing Street and paid for by the workers,” Reeves said.
“The facts speak for themselves. Mortgage costs are going up. Borrowing costs are up. Standards of living are falling. We are expected to have the lowest growth in the G7 over the next two years.”