The price increase could exceed 13% in October, when drastic increases in energy prices are expected, according to forecasts by the Bank of England. The UK is facing a cost of living crisis, with wages falling at a record pace.
The rise beat all economists’ forecasts in a Reuters poll that inflation would rise to 9.8% in July.and it will not ease the Bank of England’s fears that price pressures will linger.
Earlier this month, the Bank of England raised its key interest rate by 0.5% to 1.75% – its first half-point hike since 1995 – and predicted inflation will peak at 13.3 % in October, when regulated energy prices for households are expected to rise.
Figures on Wednesday from the Office for National Statistics (ONS) showed that prices rose 0.6% in July from June on a seasonally adjusted basis, while the annual rate of price inflation retail reached 12.3%, the highest since March 1981.
“My top priority is to control inflation, and we are acting through strong and independent monetary policy, responsible fiscal and spending decisions, and reforms to boost productivity and growth.”British Chancellor of the Exchequer Nadhim Zahawi said in response to the data.
Rising energy prices in Europe, in the wake of Russia’s invasion of Ukraine, are the main driver of inflation and are likely to push the UK into a prolonged, if shallow, recession later this year, according to the Bank of England. Although the prices invoiced by the factories registered the biggest increase since August 1977, with a jump of 17.1%, the increases in the prices paid by the factories cooled slightly, falling to 22.6% annual from the record of the 24.1% from June.
In month-on-month terms, the prInput prices rose just 0.1%, the smallest increase so far in 2022, in part due to lower global demand for steel from slowing economic growth around the world and falling crude oil prices. .
Source: Ambito
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