UK inflation hits 10.1 percent, highest in 40 years

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U.K. consumer price inflation hit 10.1 percent in the 12 months to July, jumping from 9.4 percent in June to its highest point since February 1982, according to data released today by the Office for National Statistics (ONS).

High food prices were the main driver of the spike, rising at an annual rate of 12.7 percent in July, up from 9.8 percent in June. According to the ONS, the annual rate of inflation for food and non-alcoholic beverages was last higher in August 2008, during the global financial crisis, when it reached 13.2 percent.

The ONS said the Consumer Price Index, including owner occupiers’ housing costs, rose by 8.8 percent in the 12 months to July, up from 8.2 percent in June. The largest contributor to that increase came from electricity, gas and other fuels, transport, and food and drink the ONS said.

Food and energy costs have been spiking across Europe as a result of Russia’s war on Ukraine.

The Bank of England projects inflation to accelerate to 13 percent in the final quarter this year and remain at very elevated levels throughout much of 2023 before falling to the 2 percent target in 2024.