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Inflation: Soaring bread and meat costs push price rises back to 40-year high Soaring food prices push inflation to 40-year high
(38 minutes later)
Soaring food prices have pushed the increase in the cost of living back up to the 40-year high seen in July. UK food prices are rising at their fastest rate in 42 years as the cost of living crisis continues to squeeze household budgets.
Inflation - a measure of prices - accelerated to 10.1% in September as rising living costs continued to hit household budgets. Food costs jumped 14.5% in the year to September - the biggest rise since 1980 - with bread, cereals, meat and dairy prices all climbing.
Food prices saw their biggest jump since 1980, with bread, cereals, meal and dairy prices all climbing, official figures show. It comes as people also struggle with higher energy and transport costs.
The Bank of England has said inflation could peak at 11% this year. Overall inflation - the rate at which UK prices rise - surged to 10.1% last month and is expected to climb further.
The Office for National Statistics (ONS) said inflation had hit 10.1% in the 12 months to September, after seeing a slight dip to 9.9% in August and exceeding experts' expectations, The prices of most key items in the average household's food shopping basket went up last month, including fish, yoghurt, fruit and rice, the Office for National Statistics (ONS) said.
The rise was driven largely by higher energy bills, food prices and transport costs. Experts say the rise in the cost of groceries has been accelerated by the war in Ukraine, which has disrupted grain, oil and fertiliser supplies from the region.
Food and non-alcoholic drink prices rose sharply, climbing by 14.5%, along with the cost of furniture and hotel stays - although these were partially offset by falling petrol prices. Food and drink prices have also been affected by the recent weakness in the pound, which has made imported products and ingredients more expensive.
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. Karen Betts, chief executive of the Food and Drink Federation, said: "Food and drink manufacturers continue to do everything they can to keep product prices down, but huge rises in ingredient, raw material, energy and other costs mean they have no choice but to pass some price rises on."
"These rises were partially offset by continuing falls in the costs of petrol, with airline prices falling by more than usual for this time of year and second-hand car prices also rising less steeply than the large increases seen last year."
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The latest official figures come as new Chancellor Jeremy Hunt attempts to tackle the rising cost of living, as well as the recent turmoil on financial markets sparked by his predecessor's mini-budget. According to the ONS, overall inflation is back at the 40-year high seen in July after dipping to 9.9% in August.
Over the last few weeks, mortgage prices have hit a 14-year high, driving up costs for millions at a time when energy and food bills are also rising. It said the cost of furniture and hotel stays had also risen - although these were partially offset by the falling price of petrol and airline tickets.
Mr Hunt said the government would "prioritise help for the most vulnerable while delivering wider economic stability". The Bank of England says inflation could peak at 11% in October, after inflation figures have factored in the big rise in energy bills that came in at the start of this month.
Btu shadow chancellor Rachel Reeves said: "Inflation figures this morning will bring more anxiety to families worried about the Tories' lack of grip on an economic crisis of their own making." Jen Welch, who runs an artisan bakery, said costs for all key ingredients have gone up
Jen Welch, who runs an artisan bakery, said costs for all key ingredients have gone up. Jen Welch, who runs artisan bakery Bread&, says the situation is "scary" as her costs rise rapidly.
Jen Welch, who runs artisan bakery Bread&, says the situation is "scary" with costs rising rapidly. She set up the bakery in Sunderland during the pandemic and thought that would be the toughest experience she would face.
She set up the bakery in Sunderland during the pandemic and thought that would be the toughest experience they would face. But the cost of her key ingredients such as flour, butter and oils have "spiralled out of control" and they face energy bills of more than £1,000 a month.
But the cost of their key ingredients such as flour, butter and oils have now "spiralled out of control". They also face energy bills of more than £1,000 a month.
"You think to yourself, if we can [get through the pandemic], we can weather most storms," she told the BBC. "But maybe that's not the case.""You think to yourself, if we can [get through the pandemic], we can weather most storms," she told the BBC. "But maybe that's not the case."
The bakery is trying not to put prices up at a time when shoppers are cutting back on "niceties", but Ms Welch says it may have to. The latest official figures come as new Chancellor Jeremy Hunt attempts to tackle the rising cost of living, as well as the recent turmoil on financial markets sparked by his predecessor's mini-budget.
'No let-up for families' As a result of the volatility, mortgage prices have hit a 14-year high, driving up costs for millions at a time when energy and food bills are also rising.
Mr Hunt said the government said he understood people were struggling and would "prioritise help for the most vulnerable while delivering wider economic stability".
But shadow chancellor Rachel Reeves said: "Inflation figures this morning will bring more anxiety to families worried about the Tories' lack of grip on an economic crisis of their own making."
'Rock and a hard place'
Experts said the latest inflation figures would put extra pressure on the Bank of England to hike interest rates at its next meeting in November.Experts said the latest inflation figures would put extra pressure on the Bank of England to hike interest rates at its next meeting in November.
By raising rates the Bank aims to encourage people to save more and spend less, in the hope this will stop prices rising as fast. It has increased rates seven times in a row since December as it tries to bring inflation back down to its 2% target.By raising rates the Bank aims to encourage people to save more and spend less, in the hope this will stop prices rising as fast. It has increased rates seven times in a row since December as it tries to bring inflation back down to its 2% target.
But higher rates also drive up borrowing costs for mortgage holders and businesses, with experts warning this could put a brake on economic growth.But higher rates also drive up borrowing costs for mortgage holders and businesses, with experts warning this could put a brake on economic growth.
Victoria Scholar, head of investment at Interactive Investor, said the Bank was "between a rock and a hard place" as price pressures continued to hit UK families.Victoria Scholar, head of investment at Interactive Investor, said the Bank was "between a rock and a hard place" as price pressures continued to hit UK families.
"Inflation [is] still the most pressing economic problem facing the Bank of England as well as the government," she said."Inflation [is] still the most pressing economic problem facing the Bank of England as well as the government," she said.
"Without price stability, the cost-of-living crisis will continue to weigh on the economy by squeezing household budgets and dampening business margins," she said."Without price stability, the cost-of-living crisis will continue to weigh on the economy by squeezing household budgets and dampening business margins," she said.
The rise in the cost of living is expected to peak this October, when government support to freeze energy bills at £2,500 for an average household comes into play.The rise in the cost of living is expected to peak this October, when government support to freeze energy bills at £2,500 for an average household comes into play.
But as the government looks to plug a hole in the public finances, that help is expected to be pared back from April while the prime minister is no longer committing to raising pensions in line with inflation.But as the government looks to plug a hole in the public finances, that help is expected to be pared back from April while the prime minister is no longer committing to raising pensions in line with inflation.
If the government puts up pensions in line with wages instead, retirees could miss out on £8.50 per week or £442 per year in income. That could mean the government puts up pensions in line with wages instead, meaning retirees miss out on £8.50 per week or £442 per year in income.
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said to be denied the increase "would come as a bitter blow to the many pensioners who rely on state pension as the foundation of their retirement income".Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said to be denied the increase "would come as a bitter blow to the many pensioners who rely on state pension as the foundation of their retirement income".
Former pensions minister Sir Steve Webb said older people could face a "double whammy" as their pensions were cut and energy bills soared.Former pensions minister Sir Steve Webb said older people could face a "double whammy" as their pensions were cut and energy bills soared.