Food prices have pushed inflation back to the 40-year high seen in July, according to the latest data from The Office for National Statistics (ONS).
The ONS said that Consumer Prices Index inflation for September reached 10.1%, rising from 9.9% in August. The current figure remains well above the government’s target of just 2%.
The increase was largely driven by food prices, which leapt by 14.5% year-on-year – the largest annual rise seen in the UK since 1980. These rises were seen most starkly across staple items such as bread and cereals (up 14.5% over the last year), pasta and couscous (22.7%), meat (15.3%), low-fat milk (42.1%), butter (28%) and eggs (22.3%).
ONS director of economic statistics Darren Morgan said: “After last month’s small fall, headline inflation returned to its high seen earlier in the summer… driven by further increases across food, which saw its largest annual rise in over 40 years.”
The Bank of England warned last month that inflation is expected to peak in October at just below 11%, following government support to freeze energy bills at £2,500 for an average household.
New Chancellor Jeremy Hunt has said he understands “families across the country are struggling with rising prices and higher energy bills” and would prioritise help for the vulnerable after the inflation increase was revealed.
“This government will prioritise help for the most vulnerable while delivering wider economic stability and driving long-term growth that will help everyone,” he said.
“We have acted decisively to protect households and businesses from significant rises in their energy bills this winter, with the Government’s energy price guarantee holding down peak inflation.”
Opposition parties are calling on Hunt to act swiftly and introduce measures which will bring about a resolution. Shadow levelling-up secretary Lisa Nandy described the latest inflation figure as “catastrophic for a lot of people”, adding that it was time the government “got a grip”.
Commenting on how the rise affects businesses, managing partner at global consultancy Simon-Kucher & Partners, James Brown, said: “Despite the fall in petrol prices, food inflation is pushing hard on the consumers and businesses alike, most of who are struggling to find the right pricing strategy that balances losing volumes with covering costs.
“Just as inflation hits all households differently, it hits all businesses differently too in terms of the cost increases they experience, and the price increases they have to pass on. While the government is focusing on the macroeconomic drivers of inflation and how to mitigate impacts, individual businesses are grappling with how to handle the huge cost increase they are experiencing and figuring out what and how to pass this on to their customers.
“The BoE has warned peak inflation may not have been reached and we’ve yet to see all businesses pass on the rising costs, so further price increases as we enter the Christmas shopping season are inevitable. Anyone optimistically hoping to see last month as a sign of a downward trend will be disappointed.”
