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UK inflation rate rockets past 10% on costlier food

By EARLE GALE in London | China Daily Global | Updated: 2022-08-18 09:30
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Fruit for sale arranged inside a Sainsbury’s supermarket in Richmond, west London, Britain, June 27, 2022. [Photo/Agencies]

Residents in the United Kingdom were served another large helping of bad news on Wednesday, when the country's official statistics agency told them that inflation had hit a decadeslong high.

The Office for National Statistics, or ONS, reported Consumer Price Index inflation reached 10.1 percent in July, largely because of rises in the costs of bread, cereals, cheese, eggs and milk.

The rate-the highest in 40 years and much worse than the 9.8 percent analysts had braced for-will likely trigger a reappraisal of long-term predictions and worsen the Bank of England's announcement that inflation could hit 13 percent by the end of the year.

"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," Grant Fitzner, chief economist at the ONS, said.

The jump to 10.1 percent from June's 9.4 percent was the largest monthly increase in the UK's cost of living rate since February 1982.

The bad news followed a raft of worrying developments for the UK economy, including worker shortages that could lead to crops being wasted, energy company failures, and a prediction from the Bank of England that the country is headed for a recession.

The UK government has insisted many of the factors driving the high inflation rate are out of its control, including the Russia-Ukraine conflict, which it said has pushed up global energy prices.

But the UK's finance minister, Chancellor of the Exchequer Nadhim Zahawi, said he will try to help.

"I understand that times are tough, and people are worried about increases in prices that countries around the world are facing," he said.

'No easy solutions'

While noting there are "no easy solutions", he said the government will intervene with a 37 billion pound ($44.8 billion) "support package".

"Getting inflation under control is my top priority," he added.

Zahawi said London will curb inflation through monetary policy, responsible tax and spending decisions, and improved productivity and growth.

Kit Malthouse, another member of the British government, told the BBC's Breakfast program that the person who wins the race to replace Boris Johnson as national leader will have difficult months ahead.

"The new prime minister will have to move quickly to take whatever steps they think appropriate for what will be a challenging winter and possibly beyond," he said.

But the UK's main opposition Labour Party was critical of the ruling Conservative Party, with Shadow Chancellor of the Exchequer Rachel Reeves telling the BBC that families are "worried sick about making ends meet" and that pay rises have not been keeping up.

"Only Labour can give Britain the fresh start it needs," she added.

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