UK inflation hits 10.1%, driven by soaring food and fuel prices

UK inflation has risen above 10% for the first time in 40 years, driven by soaring prices for food and fuel as households come under mounting pressure from the cost of living crisis.

The Office for National Statistics said the consumer prices index rose by 10.1% in the year to July, up from a reading of 9.4% in June and entering double figures at an earlier stage than anticipated. The figure was last higher in February 1982.

The reading was higher than the 9.8% forecast from City economists, as food and drink prices rose at the highest rates for more than a decade amid a broad-based inflationary burst across the economy.

The biggest increases came for bakery products, dairy, meat and vegetables, which were also reflected in higher costs for takeaways. Price rises for other staple items such as pet food, toilet rolls, toothbrushes and deodorants also sent inflation soaring to the highest rate in four decades.

Driven by a summer rush, with travellers flocking to packed airports across the UK, prices for package holidays also rose, while air fares increased.

The latest figures will pile renewed pressure on the government and Conservative leadership candidates as the cost of living crisis intensifies.

Rachel Reeves, the shadow chancellor, said soaring prices were leaving families worried about how to make ends meet in the run-up to a difficult winter. “People are worried sick, and while the Tories are busy fighting and ignoring the scale of this crisis. Only Labour can give Britain the fresh start it needs,” she said.

Households are expected to come under further pressure this autumn from a fresh rise in energy bills, which the Bank of England forecasts will drive inflation above 13% and trigger a long recession as families rein in their spending.

The chancellor, Nadhim Zahawi, said getting inflation under control was his top priority, while the government would act to support hard-pressed families. “I understand that times are tough, and people are worried about increases in prices that countries around the world are facing.”