Food and energy drive UK inflation back to double-digits – business live | Business
Inflation was driven up by the surge in gas and electricity bills over the last year, and the jump in food and drink costs.
The ONS says:
The largest contribution to the annual rate in September 2022 is from housing and household services. The second largest contribution came from food and non-alcoholic beverages, which has overtaken that from transport.
Newsflash: Inflation in the UK has risen to 10.1% as the cost of living crisis continued to hit households.
That’s matches July’s 40-year high.
Here’s Paul Kelso of Sky News on the implications of today’s inflation report:
One in seven people in the UK are skipping meals or going without food, according to new polling data released by the Trades Union Congress (TUC).
The data from an MRP poll by Opinium reveals that more than half of British people are cutting back on heating, hot water and electricity in the cost of living squeeze, and one in 12 have missed the payment of a household bill.
The polling found that one in seven people are skipping meals but that rises to one in five people in nearly 50 constituencies across the country.
It reveals that Birmingham Ladywood is the constituency with the highest number of people going without food, at 29%, followed by Dundee West at 27%, Glasgow at 24% and Rhondda at 24%.
Here’s the full story:
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The scale of Britain’s cost of living crisis will be exposed again today when September’s inflation report is released, at 7am.
Economists predict that consumer prices rose by a painful 10% over the last year. That would push inflation back into double-digit levels, having dipped slightly to 9.9% in August.
Soaring food prices and the energy crisis have been squeezing household budgets all year, with inflation running sharply ahead of wage growth. Back in July, inflation hit 10.1% for the first time in 40 years.
Michael Hewson of CMC Markets explains:
UK inflation got a bit of a respite in August falling back to 9.9% from 10.1% in July, with the fall in petrol prices helping to pull the headline number back below double figures.
While welcome news on a headline level, food prices are still acting as a tailwind rising by 13.1% and up from 12.7% in July, with the price of staples like milk, eggs, and butter all up by over 20%. These increases are expected to filter into September with a move back above 10%.
September inflation figure has implications for pensioners and those on benefits, as it’s used in the Work and Pensions Secretary’s annual benefits uprating review.
If the government decides to uprate benefits by inflation, this is the percentage they will be increased by, and will come into effect from next April.
But yesterday, Liz Truss’s official spokesperson refused four times to commit to keeping the state pension triple lock, under which pensions would rise by the highest of average earnings, CPI inflation based on September’s rate, or 2.5%.
Today’s inflation rate will also be a big factor in how sharply the Bank of England raises interest rates next month. The money markets currently suggest the Bank is likely to lift base rate by a full percentage point, from 2.25% to 3.25%.
Last night, the Bank confirmed it will push ahead with selling £80bn of UK government bonds from the start of next month, a day later than planned, despite fears over choppy conditions in financial markets after the mini-budget.
7am BST: UK consumer inflation report for September
7am BST: UK producer price index of factory inflation for September
9.30am BST: UK house price index for August
10am BST: Eurozone inflation report for September
Noon BST: US weekly mortgage applications
3pm BST: Treasury Committee questions Bank of England deputy governor Sir Jon Cunliffe