UK inflation reaches 10%, highest level since 1982| MENAFN.COM

Tuesday, 04 October 2022 07:53 GMT

UK inflation reaches 10%, highest level since 1982


(MENAFN) British consumer price inflation increased to 10.1% in July, its highest level since February 1982, up from a yearly rate of 9.4% in June, according to official data released on Wednesday. This increased pressure on consumers.

The increase exceeded everyone's predictions in a Reuters poll for inflation to increase to 9.8% in July, and it will not allay the Bank of England's concerns that pricing pressures may become entrenched.

The BoE increased its benchmark interest rate earlier this month by 0.5% to 1.75% while stating that a recession was inevitable, marking the first half-point increase since 1995.

When home energy prices are next scheduled to rise, in October, it was predicted that inflation will reach a peak of 13.3%.

"Every upward inflation surprise tightens the bind the BoE finds itself in, with mounting inflation pressure combined with growing recessionary headwinds," stated Luke Bartholomew, senior economist at asset management at asset manager abrdn.

He anticipates the BoE to increase interest rates by another half point to 2.25% at its next meeting in September, as predicted by the majority of economists in a Reuters survey conducted earlier this week.

The yield on two-year British government bonds, which is influenced by expectations for interest rates, soared to its highest level since June 21, when it reached a 13-year high.

According to data released by the Office for National Statistics on Wednesday, prices increased 0.6% on a non-seasonally adjusted basis in July compared to June. Retail price inflation reached 12.3% annually, which is the highest level since March 1981.

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