UK Inflation rose to a 40-year high of 10.1% in July as prices continued to surge across key components and put further pressure on the health of the UK economy.
In contrast to the latest set of US inflation data, UK inflation beat analyst estimates of 9.8% suggesting inflation could rise further in the months to come as economists struggle to model the impact of rising energy bills and food prices.
“UK headline CPI inflation surprised on the upside and rose 10.1% year-on-year (consensus: 9.8%), compared to 9.4% in June. The CPI monthly increase was +0.6% (consensus: +0.4%), compared to +0.8% in June,” said Rob Clarry, Investment Strategist at Evelyn Partners.
The rise in prices was driven by energy prices, but with core CPI inflation, which excludes energy, alcohol and tobacco rising 6.2%, it highlights a broad increase in prices.
“Rising inflation continues to attack consumers from all angles and shows no signs of easing off anytime soon,” said Les Cameron, Savings Expert at M&G Wealth.
There will be growing criticism of the UK government’s lack of action around rising prices as UK inflation soars above rates of other major developed economies.
“The ONS data indicates that inflation rose more sharply in the UK than other G7 nations like France, Germany, Italy and the US,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.