UK inflation at highest level in 40 years in July

Inflation in the UK hit another 40-year high in July with rising food and energy costs, and the cost-of-living crisis worsened to record levels.

According to the ONS, the United Kingdom’s consumer price index (CPI) rose 10.1% in July from the same month a year earlier. This was the strongest increase since February 1982, compared with 9.4% in June.

Month-on-month, the CPI rose 0.9% in July, compared with 0.8% in June, but still not as much as in April, when it was up 2.5% from March.

The ONS noted in the report that rising food prices were the main cause of annual inflation between June and July.

The Bank of England (BoE) has raised interest rates six times in a row to curb inflation. Earlier this month, the BoE raised its key interest rate the most in 27 years, or since 1995, by 0.50% to 1.75%.

The UK economy is expected to enter recession from the fourth quarter of 2022 to the end of 2023, i.e. for five quarters – the longest period since the global financial crisis.

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