UK inflation jumps to 10.1 percent in July 2022

British consumer price inflation jumped to 10.1% in July, 2022, – its highest since February 1982, up from an annual rate of 9.4% in June.

This intensifies the squeeze on households, official figures showed on Wednesday.

The increase was above all economists’ forecasts in a poll for inflation to rise to 9.8% in July, and will do nothing to ease the Bank of England’s (BoE) concerns that price pressures may become entrenched.

Despite warning that a recession was likely, the BoE earlier this month raised its key interest rate by 0.5% to 1.75% – its first half-point rise since 1995.

It forecasts inflation would peak at 13.3% in October, when regulated household energy prices are next due to rise.

Meanwhile, a two-year British government bond yields – which are sensitive to interest rate expectations – surged to their highest since June 21, when they had struck a 13-year high.

Wednesday’s figures from the Office for National Statistics showed that prices rose 0.6% in July from June on a non-seasonally adjusted basis. The annual rate of retail price inflation hit 12.3%, its highest since March 1981.

Reuters/Hauwa Abu