The latest figures from the Office for National Statistics (ONS) show that the Consumer Prices Index inflation (CPI) reached 10.1% last month, putting households under even more pressure as food prices spiked and pushed inflation to yet another 40-year high.
The increase was largely down to food prices and staples including toilet rolls and toothbrushes, the ONS said. The measure had been expected to reach 9.8%, according to an average of analysts' estimates calculated by Pantheon Macroeconomics and is the biggest jump in the cost of living since February 1982, when CPI reached 10.4%.
It is also a massive jump from the 9.4% inflation in June. Inflation is expected to fall back a little in August, however, according to estimates it could soar to 13.3% in October when the energy price cap rises again which, according to the Bank of England, could push the UK into a recession.
ONS chief economist Grant Fitzner said: "A wide range of price rises drove inflation up again this month.
"Food prices rose notably, particularly bakery products, dairy, meat and vegetables, which was also reflected in higher takeaway prices.
"Price rises in other staple items, such as pet food, toilet rolls, toothbrushes and deodorants, also pushed up inflation in July.
"Driven by higher demand, the price for package holidays rose, after falling at the same time last year, while air fares also increased.
"The cost of both raw materials and goods leaving factories continued to rise, driven by the price of metals and food respectively."
Energy prices and inflation
According to the most recent estimates by experts the price cap will reach close to £3,640 in October, up from £1,971 at the moment.
Then energy prices are expected to rise even further as new predictions from energy consultancy Auxilione said that at today's prices the cap might rise to £4,722 in January before hitting £5,601 in April.
Whether or not the Bank's October prediction proves true remains to be seen - its forecast for July's CPI was 9.9%, just 0.2 percentage points behind where the ONS has now measured it.
Food prices
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the difference between the Bank's forecast and the measurement is mainly down to surging food prices.
Food and non-alcoholic beverages prices increased by 12.7%, the ONS said, a rise from 9.8% the month before and the highest since August 2008.
The statisticians track the prices of 11 food and non-alcoholic beverages categories, and in July all of them rose.
The biggest impacts on inflation were from bread and cereals, and milk, cheese and eggs. Shop-bought milk, cheddar and yoghurt prices "increased notably", the ONS said.
There were also smaller impacts from rising cooked ham and bacon prices, vegetables, sugar and jam, among other things.
UK Government support
In response to the latest inflation figures, Chancellor Nadhim Zahawi, said: "I understand that times are tough, and people are worried about increases in prices that countries around the world are facing.
"Although there are no easy solutions, we are helping where we can through a £37 billion support package, with further payments for those on the lowest incomes, pensioners and the disabled, and £400 off energy bills for everyone in the coming months.
"Getting inflation under control is my top priority, and we are taking action through strong, independent monetary policy, responsible tax and spending decisions, and reforms to boost productivity and growth."
Rocio Concha, director of policy and advocacy at Which?, said: "These figures underline the scale of the cost of living crisis and make clear that millions of people face a dire financial situation in the months ahead.
"With bills set to rise further, it's clear that the current level of cost of living UK Government help will not be sufficient.
"Ministers must now move quickly to increase the amount of support for those who are struggling, and businesses in essential sectors, such as supermarkets, energy and telecoms, must also do everything they can to make sure customers are getting a good deal and extra support if they need it."
Labour shadow chancellor Rachel Reeves said: "We must get a grip on rising inflation leaving families worried sick about making ends meet.
"Labour's fully-costed plan to freeze the energy price cap will bring inflation down this winter, easing the burden on households and businesses.
"It will mean that households won't pay a penny more for their energy bills this winter.
"People are worried sick and while the Tories are busy fighting and ignoring the scale of this crisis, only Labour can give Britain the fresh start it needs."
How everyday items have risen in price in the past 12 months
In each case, the figure is the percentage change in the average price over the 12 months to July 2022.
Food
- Low-fat milk, 34.0%
- Butter, 27.1%
- Pasta and couscous, 24.4%
- Olive oil, 23.6%
- Margarine and other vegetable fats, 22.5%
- Jams, marmalades and honey, 21.2%
- Sauces, condiments, salt, spices and culinary herbs, 21.2%
- Cheese and curd, 17.9%
- Ready-made meals, 16.0%
- Potatoes, 15.7%
- Eggs, 14.6%
- Yoghurt, 14.2%
- Pork, 13.2%
- Edible ices and ice cream, 12.9%
- Fish, 12.8%
- Bread, 11.0%
- Pizza and quiche, 9.9%
- Fruit, 8.5%
- Rice, 6.7%
- Sugar, 5.1%
Clothing and shoes
- Clothing accessories, 7.7%
- Garments for men, 7.4%
- Garments for infants and children, 7.4%
- Footwear for infants and children, 7.3%
- Garments for women, 6.4%
- Footwear for women, 5.5%
- Footwear for men, 3.9%
Electricity, gas and other fuels
- Liquid fuels, 114.1%
- Gas, 95.7%
- Electricity, 54.0%
- Solid fuels, 26.9%
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