UNITED KINGDOM: British inflation returned to double digits last month, matching a 40-year record reached in July, dealing consumers already facing a cost-of-living crisis a fresh blow. The greatest increase in food costs since 1980 was the cause of this.
In terms of yearly growth, the consumer price index climbed by 10.1% in September, according to the Office for National Statistics.
Following an increase of 9.9% in August, a survey predicted a reading of 10.0%.
On the back of the news, the pound fell under $1.13 and was last down 0.2% for the day.
The statistics underscored the challenging circumstances facing British households, particularly those with the lowest incomes, who now face uncertainty regarding the scope of financial support that may be available to them in light of recent government U-turns.
In light of Wednesday’s figures, the Bank of England will also feel pressure to accelerate its interest rate hike campaign next month.
Short-dated Early trading saw a sharp increase in British government bond yields, which are sensitive to fluctuations in interest rate predictions.
According to historical model projections of the CPI, the largest contributor to inflation in September was a 14.5% increase in food and non-alcoholic beverage costs, which was the largest increase since April 1980.
The “triple lock” indexing of state pensions uses the September inflation rate as a point of reference; nevertheless, pensioners have not yet received a definitive response from the government regarding whether their benefits will increase in pace with inflation in 2019.
After the program’s scope was reduced from two years to six months by the new finance minister, Jeremy Hunt, the government’s support for home and commercial energy bills is also in doubt.
In an effort to rebuild investor confidence in Britain, Hunt largely reversed Prime Minister Liz Truss’s economic growth program on Monday. As a result, many households now face increased costs directly from the financial market turmoil.