Today, the inflation rate reached a new 40-year high as people battle to make ends meet.
In July, the headline CPI rate reached 10.1%, significantly above the 9.8% predicted by economists. It increased from 9.4% the previous month. ONS Chief Economist Grant Fitzner stated, “A variety of price increases pushed inflation higher this month.” The increase in food prices, particularly for bakery items, dairy, meat, and vegetables, was also reflected in higher takeout prices. Inflation increased in July due to price increases in pet food, toilet paper, toothbrushes, and deodorants, among other necessities.
‘Due to rising demand, the price of vacation packages jumped after declining over the same period last year, while plane tickets also rose.
The rising prices of metals and food pushed up the prices of raw materials and factory-produced goods.
Mr. Zahawi stated, “I recognize that circumstances are difficult and that people are concerned about price hikes that countries throughout the globe are experiencing.
“Although there are no easy solutions, we are helping where we can with a £37 billion support package, including additional payments for people on the lowest incomes, pensioners, and the disabled, and £400 off everyone’s energy bills in the coming months.
“Containing inflation is my top concern, and we are taking action through a strong, independent monetary policy, sensible tax and spending decisions, and measures to increase productivity and growth,” the president said.
According to separate official data, RPI inflation hit 12.3% in July.
In the past, this approach has been used to limit price rises on some train tickets in England, Scotland, and Wales for the next year.
As inflation continues to retreat, the UK Government will keep 2023 increases below RPI.
However, it has not disclosed how it will compute the increases.
The Bank of England anticipates that CPI inflation will peak later this year at 13.3%, with the United Kingdom headed towards recession.
In October, the energy price cap, which regulates what more than 20 million households pay for gas and electricity, will increase again.
The cap is expected to reach approximately £3,635 based on the most recent projections. That would be an 84% increase from the current record-high price ceiling.
However, the Bank’s prediction for July’s CPI was 9.9%, which was 0.2 percentage points below the actual figure.
Expenditures on credit cards soar amidst rising expenses.
In response to the rising expense of living, the use of credit cards has increased by a factor of three.
In May, credit card users in the United Kingdom spent just under £20 billion, a 33 percent increase compared to the same month last year, according to official data from UK Finance.
The outstanding balances on credit card accounts increased by about 10% in the year leading up to May.
Additionally, the number of credit card transactions increased by more than a quarter year-over-year, with almost 357 million payments made in May by UK cardholders both domestically and internationally.
Inflation as measured by the Consumer Price Index hit 7.9% in May and has since risen higher.
Since the beginning of the year, credit card spending has increased consistently, coinciding with rising utility costs and double-digit food and beverage inflation.
UK Finance reported that total debit card expenditure increased by only 1% compared to the same period previous year.
Chief UK economist at Pantheon Macroeconomics, Samuel Tombs, attributed the disparity primarily to rising food prices.
The ONS reported that food and non-alcoholic beverage prices rose by 12.7%, up from 9.8% the previous month and the largest increase since August 2008.
The prices of eleven food and non-alcoholic beverage categories tracked by statisticians increased in July.
Cereals and bread had the greatest impact on inflation, followed by milk, cheese, and eggs.
According to the ONS, the price of store-bought milk, cheddar, and yoghurt “significantly rose.”
There were also modest effects from the price increases of cooked ham and bacon, vegetables, sugar, and jam.
The director of policy and advocacy at Which?, Rocio Concha, stated, “These data highlight the magnitude of the cost-of-living issue and make it apparent that millions of people face a grave financial position in the coming months.”
‘Given that expenses will continue to climb, it is evident that the existing amount of cost-of-living assistance will not be sufficient.
Businesses in key industries, such as supermarkets, electricity, and telecommunications, must also do everything possible to ensure that customers are receiving a decent deal and, if necessary, additional support.
In response to the rising expense of living, the use of credit cards has increased by a factor of three.
In May, credit card users in the United Kingdom spent just under £20 billion, a 33 percent increase compared to the same month last year, according to official data from UK Finance.
The outstanding balances on credit card accounts increased by about 10% in the year leading up to May.
Additionally, the number of credit card transactions increased by more than a quarter year-over-year, with almost 357 million payments made in May by UK cardholders both domestically and internationally.
Inflation as measured by the Consumer Price Index hit 7.9% in May and has since risen higher.
Since the beginning of the year, credit card spending has increased consistently, coinciding with rising utility costs and double-digit food and beverage inflation.
UK Finance reported that total debit card expenditure increased by only 1% compared to the same period previous year.