Consumer prices in the UK spiked to a 40-year high in September, after slightly easing in the previous month, according to estimates published on Wednesday by the UK’s Office for National Statistics.
“The Consumer Prices Index (CPI) rose by 10.1% in the 12 months to September 2022, up from 9.9% in August and returning to July’s recent high,” the ONS said in a press release.
According to the agency, rising costs on food, transport, housing and household services were the largest contributing factors to inflation last month. Food prices in particular were up 14.6% year-on-year, while transport costs rose 10.9% against 2021. The cost of household goods and furniture also increased by 10.8%.
Fuel prices in September were still up for the year at a staggering 26.5%, but lower compared to August’s 32.1%.
Analysts polled by CNBC say that the latest inflation data will affect the Bank of England’s approach toward monetary policy in the near term. Britain’s new Finance Minister Jeremy Hunt recently said that “help for the most vulnerable” will be a priority for the government in dealing with high inflation rates, along with “delivering wider economic stability and driving long-term growth that will help everyone.”
Upon taking his post, Hunt reversed most of the tax cuts introduced by his predecessor, Kwasi Kwarteng, late last month. The cuts caused a market upheaval, sent the British pound plunging and were ardently criticized by both the UK parliament and the public. The situation forced Kwarteng to resign and Prime Minister Liz Truss to apologize for “mistakes” in her new economic policy. Hunt’s reversal of the measures raises the prospect of the Bank of England slowing its interest rate hikes, analysts say.
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