UK inflation back to double digits as price rises hit 10.1%

2 min read | October 20, 2022 12:01 AM AEDT | By Abhishek Sharma

UK inflation back to double digits as price rises hit 10.1% — Image source: © Ronniechua | Megapixl.com

Highlights:

After falling to 9.9% in August, UK inflation has climbed back to double digits.

The CPI for September reached 10.1% and is projected to rise more in the coming months.

Inflation in the UK has reached double digits again after slightly dipping below 10% in August. According to the latest data from the Office for National Statistics (ONS), UK inflation jumped to 10.1% in September, the same as the July level. The last time it surpassed the 10% mark was in February 1982.

With the cost-of-living crisis continuing to grip households, the latest numbers pose concern for the coming months as the new energy price cap has come into effect from October, raising the average household energy bills to about £2,500.

Image source: © Kontakt5956 | Megapixl.com

Figures from the ONS revealed that the Consumer Prices Index (CPI) increased by 10.1% in the 12 months to September 2022, 0.2 percentage points higher than August's 9.9%. On a monthly basis, CPI climbed by 0.5% in September.

Among the largest contributors to the high inflation were food prices, which have been rising due to supply chain issues and rising input costs. The hike was partly offset by the motor fuel prices, which have been falling in line with global oil prices.

The latest data shows that food and drink price inflation has reached levels that were last seen in April 1980. The prices for food and non-alcoholic beverages increased by 14.6% in the 12 months to September, up from August's 13.1%. Besides, food inflation has now risen for 14 months in a row. It was -0.6% in July.

On the other hand, housing and utility prices jumped by 20.2% last month against the same period the previous year. Hotel prices also increased this year.

Last month, the Bank of England warned that inflation might peak in the month of October at slightly under 11% after the government's energy support package for households.

Following the latest inflation numbers release, new chancellor Jeremy Hunt said he'll prioritise support for the vulnerable while delivering wider economic stability. He added that the government's energy price support scheme would hold down peak inflation in winter.

Notably, the inflation figures for September are considered important for the Treasury as they are generally used as the benchmark to increase benefits and the state pension. It is important to note that the Liz Truss government has recently refused to commit to state pension hikes.

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