UK inflation reaches 40-year high again as Brits battle cost-of-living crisis

2022-10-20 10:19:43
UK inflation reaches 40-year high again as Brits battle cost-of-living crisis

Inflation in the UK has risen above 10% for the second time this year as households come under pressure from the sharpest annual rise in food prices for more than 40 years amid the cost of living crisis.

The Office for National Statistics (ONS) said the consumer prices index rose to 10.1% in September, returning to double digits after a slight dip to 9.9% in August. The figure was last higher in 1982. City economists had forecast a slightly smaller rise to 10%.

Soaring prices for food and drink were the biggest driver behind the latest cost of living increase, with an annual rise of almost 15%, the fastest annual jump since April 1980, as the price of bread and cereals, meat, milk, cheese and eggs shot up.

The September inflation figure is crucial as it is the one used to uprate pensions and benefits for the following April.

Prime Minister Liz Truss promised on Wednesday to maintain the triple lock guarantee on pension increases, despite speculation that her chancellor, Jeremy Hunt, could break it in a push for budget savings.

The Conservative party manifesto commitment ensures state pensions rise each year in line with inflation, average wage growth or 2.5% – whichever is highest.

However, benefits remain vulnerable. Charities warned that failure to provide an inflation-matching increase, after the biggest real-terms cut for 50 years earlier this year, would drive up poverty.

“It is morally indefensible that the government should still be considering leaving people with even less ability to pay for what they need,” said Rebecca McDonald, the chief economist at the poverty charity the Joseph Rowntree Foundation.

The government is thought to be considering raising benefits in line with wage growth of 5.5%, saving more than £2 billion next year for the exchequer, after Hunt said decisions of “eye-watering difficulty” were needed to balance the books after the failed mini-budget.

The Resolution Foundation said such a switch would have stark consequences for families struggling with soaring living costs. A single disabled adult on universal credit would lose £380, while a working single parent with one child would lose £478, and a working couple with three children would lose £978.



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