Inflation in the UK reached 10.1% in July, setting a new 40-year record high, the latest data from the Office for National Statistics (ONS) shows.
The latest figure is driven by a 43.7% rise in the price of motor fuels year-on-year and an increase of 12.7% in the price of food and non-alcoholic beverages.
Last month, the ONS reported inflation hitting 9.4% in June, rising from 9.1% in May.
The Bank of England (BoE) increased the base rate by 50 basis points to 1.75% on 4 August.
The increase marked the sixth base rate rise since December 2021 after a decade of historic lows. Interest rates are now at their highest since December 2008.
Commenting on the latest data, Hargreaves Lansdown senior personal finance analyst Sarah Coles explains: “Inflation has broken through double-digits, hitting another 40-year high. The rise in the price of life’s essentials is causing horrible problems for millions of people, as the cost of energy and food soars. What’s even more worrying is that this isn’t the last of it.”
“The Bank of England now expects inflation to peak at 13% later this year, and stay higher for longer. It means the pain is far from over.”
“These figures are likely to fuel speculation of another 0.5 percentage point interest rate rise next month, piling pressure on borrowers. The bank is trying to bring core inflation down – a measure that strips out energy and food prices which are at the mercy of global markets.”
“The fact that this rose in July, from 5.8% to 6.2%, means we can’t expect any let-up in rate rises. It means anyone who has been borrowing in a desperate attempt to make ends meet is going to face even harder challenges in the months to come.”
Simple Fast Mortgage director Rob Peters says: “We’re all being held hostage by energy price terrorists. No.10 are our expert negotiators and they are about as much use as a porcelain hammer in a game of whac-a-mole.”
“In recent years, the country has blundered from one disaster to another and the public are desperate for strong leadership to step forward and guide the way to safety. I just can’t see it happening anytime soon.”
Also weighing in, Standard Life Home Finance head of sales Kay Westgarth explains: “It’s clear that the cost-of-living crisis is squeezing household finances – whether you are a homeowner or someone who is keen to take the first step on the property ladder.”
“That said, in a flashpoint where rising inflation and record energy prices are affecting disposable incomes, it’s not surprising that we are seeing people postponing their property-owning dreams. While the property market has remained resilient and the long-term picture looks positive, growth may well slow in the coming months.”
