The global persistent increase in prices of goods and services following the Russia-Ukraine war has pushed the U.K. headline inflation back to double-digit in the month of September.
The Consumer Price Index, which measures the inflation rate in an economy at a particular period, rose to 10.1% in September, the same rate it was in July and the highest in 40 years.
The jump in food prices was what drove UK inflation back to a double-digit figure in the month. It rose back to 10.1% after it had slightly dipped to 9.9 percent in August.
Investors King learnt that the rate of 10.1 percent recorded in September surpassed market expectations of 10 percent. This is the highest level since April 1980.
A closer perusal shows that the largest contributor to the increase in inflation rate was the soaring price of food. The price of food and non-alcohol rose to 14.8 percent as against the 13.4 percent recorded in August 2022.
Housing and Utilities also rose to 20.2 percent amid soaring prices for electricity, gas, and home fuels.
In contrast, the increase in pay across many sectors does not keep up with the rising cost of goods.
This, therefore, has decreased the purchasing power of several people in the UK, especially given that wages of people working in the private sector have only risen by 6.2 percent during the same period while it only increased by 2.2% for those in the public sector.
While commenting on the new inflation rate, the British Finance Minister, Jeremy Hunt stated the UK government will channel assistance to the most vulnerable people while the government works out a macroeconomic plan to stabilise the inflation rate and deliver economic growth.
“I understand that families across the country are struggling with rising prices and higher energy bills.
“This government will prioritise help for the most vulnerable while delivering wider economic stability and driving long-term growth that will help everyone,” Jeremy stated.
Meanwhile, the Bank of England has stated that it expects inflation to “peak at 11 percent and then remain above 10% for a few months before starting to come down”.
Investors King understands that inflation has been a major concern for parts of the world. In Nigeria, the recent publication of the National Bureau of Statistics (NBS) puts Nigeria’s inflation rate at 20.8 percent.
