Cost of Living: UK inflation rate falls slightly from July’s 40 year high

UK inflation fell slightly to 9.9% in the 12 months to August, five times greater than the 2% target the Bank of England had set.

The Consumer Prices Index (CPI) had soared in July to more than 10 per cent, a new 40-year high, with notable price rises in food items including dairy, meat and vegetables.

The slight dip in today’s inflation figures is being driven by a fall in the price of petrol but the cost of food and drink remain on the up.

The Office for National Statistics (ONS) said this morning: “Motor fuel price changes are the main driver behind the overall movements within transport, with fuel prices increasing by 32.1% in the year to August 2022.”

“Average petrol and diesel prices stood at 175.2 and 186.6 pence per litre, respectively, in August 2022, compared with 134.6 and 137.0 pence per litre a year earlier.”

“The annual rate for motor fuels eased from 43.7% to 32.1% between July and August 2022.”

“This is principally a result of petrol prices falling by 14.3 pence per litre between these months.”

“A year ago, petrol prices rose by 2.0 pence per litre between July and August 2021.”

“Diesel prices also contributed to the change in the rate, falling by 11.3 pence per litre this year, compared with a 1.5 pence per litre rise a year ago.”

The ONS said: “Food and non-alcoholic beverage prices rose by 13.1% in the 12 months to August 2022, up from 12.7% in July.”

“The largest upward effect came from milk, cheese and eggs, where prices of milk and cheese rose between July and August 2022 by more than between the same two months a year ago.”

“Overall prices for food and non-alcoholic beverages have risen throughout 2022, and the 1.5% increase between July and August 2022 was the largest July to August rise since 1995, when a constructed series for food and non-alcoholic beverages showed a 1.6% increase.”

Commenting on today’s inflation figures, TUC General Secretary Frances O’Grady said:

“Inflation is still very high and hitting family budgets hard. The Chancellor’s mini budget next week should use the power of government to help with surging costs this winter.

“He should fund a proper cost of living increase for public sector workers. He should bring forward an immediate increase to the minimum wage this autumn. And he should boost universal credit now, instead of waiting until April for the next rise.”