UK: Inflation rises to highest level in 40 years

Written October 19, 2022 at 08:53

LONDON, Oct 19 (Reuters) – Britain’s inflation rose slightly more than expected in September to 10.1% year-on-year, returning to its 40-year high in July on the back of sharp increases in food prices, data showed official statistics released on Wednesday.

Economists polled by Reuters on average expected an acceleration to 10.0% after 9.9% the previous month.

The main driver of inflation in September was the 14.5% increase in prices of food and non-alcoholic beverages, the largest increase for this category since April 1980.

Hotel prices also rose in September, the Office for National Statistics (ONS) said.

“The release highlights the risk that underlying inflation will remain high even as the economy weakens,” said Paul Dales, chief economist at Capital Economics.

The consumer price index excluding energy and food reached 6.5%, the highest level in 30 years.

Britain has been hit hard by rising European natural gas prices caused by the war in Ukraine, which has increased supply chain bottlenecks and labor shortages.

After the inflation data, the finance minister said the government will prioritize helping the most disadvantaged.

“This government will help the most vulnerable first, while ensuring wider economic stability and long-term growth that will help everyone,” Jeremy Hunt said in a statement. (Reporting by Andy Bruce and Ana Nicolaci da Costa, with William James and Farouq Suleiman, French Editing by Laetitia Volga, Editing by Marc Angrand and Kate Entringer)

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