British households are being pummelled by the biggest increase in the cost of living in decades as prices continue to soar.
Experts now predict that Consumer Prices Index (CPI) inflation will climb to 9.8%, inflicting further pain on already-stretched families.
The average of analysts’ estimates was calculated by Pantheon Macroeconomics ahead of new figures released at 7am on Wednesday are expected to show inflation soaring, with food and fuel seeing some of the sharpest increases.
This would be the UK's highest recorded figure since February 1982, when CPI reached 10.4%, according to ONS estimates.
Samuel Tombs, chief UK economist at the economic research consultancy firm, said a fuel price rise of 3% month-on-month in July had helped contribute to the expected rise.
Predicting that the CPI would fall in August before spiking again in September and October, he said: “Looking ahead, CPI inflation probably eased in August largely due to a 7% or so month-to-month fall in motor fuel prices,”
“But the relief for households will be short-lived, due to the impending 80% or so jump in Ofgem’s price cap. This could push up inflation by nearly four percentage points in October.”
Another piece of sobering economic news is also expected to land later on Wednesday morning when an inflation figure used to set train ticket prices will be released by the ONS at 9:30am.
The retail prices index (RPI), which is typically used by the UK, Scottish and Welsh governments to set the rail fare cap for the following year, is expected to come in at 12%.
While the Department for Transport announced on Monday that the 2023 increase in England will be set below the inflation figure, campaign groups have suggested this may do little to protect passengers from steep hikes in costs.
Chris Page, chair of pressure group Railfuture, said: “The Government claims that the fare rise will be below inflation, but the devil will be in the detail.
“They won’t say what the increase will be, or which fares it will apply to.
“If the Government was serious about tackling the cost-of-living crisis it would make rail travel much more affordable and make it easier for people to use cars and planes less.”
The slew of worrying inflation figures follows a grim warning earlier this month from Governor Andrew Bailey at the Bank of England that the country would fall into a recession when overall inflation peaks later this year at 13.3%.
