The Bank of England expects inflation in the UK to surpass the current historical highest to reach 13.3% in October.
According to the Office for National Statistics (ONS), the consumer price index has reached a double-digit in the UK as inflation rose to its highest in 40 years. The ONS revealed on August 17th that the consumer price index surged 10.1% annually in the 12 months to July 2022. The figure is quite a leap from 9.4% in June and above the prediction of 9.8%. The ONS attributed the increase in housing and household services, such as fuel, food, and beverages, to the historic surge.
UK Inflation Spikes to Highest in 40 Years with Rising Food Prices Intensifies
After almost exceeding £2 recently, the pump price in the UK is about £1.72 per liter. Diesel price stands at £1.84 per litter after dropping below the £2 price level in June. According to the ONS, increasing food prices are the latest contributor to the alarming highest inflation rate across the UK. On the other hand, core inflation came in at 6.2% in the 12 months to July 2022. The percentage represents an increase from 5.8% in June and a rise above the projected 5.9%.
The director of retail strategy at PwC, Kien Tan, spoke on the historical inflation spike in the UK. Tan said:
“Supermarkets have had little choice but to pass on price increases from suppliers, themselves contending with unprecedented inflation in raw material and ingredient input costs. This has been particularly acute in labour and utility intensive categories like dairy, with reports of the price of a pint of milk having more than doubled in same stores since the start of the year.”
Per the ONS, the indicative modeled consumer price inflation estimates “suggests that the CPI rate would last have been higher around 1982, where estimates range from nearly 11% in January down to approximately 6.5% in December.”
Predictions of Higher Inflation Rate
Chief strategy officer at the Human Rights Foundation, Alex Gladstein, also has something to say about the situation. Gladstein said the UK had joined the long list of countries that are suffering from double-digit price increases. Britains are now among over 2 billion people. Coin Bureau suggested in a tweet that the worst is yet to come. He wrote that “the winter gas surcharges haven’t even begun yet.”
Brits are in fear with uncertainties about the future regarding inflation in the UK. The Chief UK economist at Capital Economics, Paul Dales, said in July that inflation may rise to 12% in October. He also mentioned that interest rates may increase from 1.25% to 3%, “although it’s finely balanced whether they rise by 25bps or 50bps in August.
Meanwhile, the Bank of England expects inflation in the UK to surpass the current historical highest to reach 13.3% in October.
Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience.
Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.
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