May 30, 2023

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UK inflation returns to 40-year high of 10.1%

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UK inflation returns to 40-year high of 10.1%

Higher food prices pushed UK inflation back to a 40-year high of 10.1 per cent in September, exceeding expectations of a smaller rise.

The Office for National Statistics said the consumer price index rose 0.5 per cent in the month compared with August, a larger increase over the same month than in 2021 when the index rose 0.3 per cent.

Darren Morgan, ONS director of economic statistics, said: “After last month’s small fall, headline inflation returned to its high seen earlier in the summer. The rise was driven by further increases across food, which saw its largest annual rise in over 40 years, while hotel prices also increased after falling this time last year”.

There had been a further small drop in petrol prices, offsetting the rise in other prices and downward contributions from airfares and second-hand car prices.

That return to double-digit inflation will be difficult for ministers and the Bank of England. It shows that price rises have not yet peaked, despite the energy price guarantee limiting gas and electricity bills this winter.

The September figure is also the number normally used for the uprating of benefits, including the state pension. Jeremy Hunt, the new chancellor, on Tuesday said he could not guarantee the government would stick to its “triple lock” commitment on pensions, to increase them by earnings, prices or 2.5 per cent, whichever is highest.

Responding to the figures on Wednesday morning, the chancellor gave no guarantee he would uprate pensions or benefits by the 10.1 per cent inflation figure. “This government will prioritise help for the most vulnerable while delivering wider economic stability and driving long-term growth that will help everyone,” Hunt said in a statement.

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