You are here: Home - Household Bills - News -

Inflation hits double figures as food and energy costs soar

Written by: Emma Lunn
The Consumer Prices Index (CPI) rose by 10.1% in the 12 months to July 2022, up from 9.4% in June, according to the Office for National Statistics (ONS).

The inflation rate has risen sharply over recent months and the July figure was the highest annual CPI inflation rate in the ONS’ National Statistic series which began in January 1997.

The Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 8.8% in the 12 months to July 2022, up from 8.2% in June. The July 2022 figure is the highest recorded annual inflation rate in the National Statistic series, which began in January 2006.

The biggest contributors to the annual CPIH inflation rate in July 2022 came from housing and household services (mainly energy, fuel, and owner occupiers’ housing costs), transport (petrol and diesel), and food and non-alcoholic drinks.

The typical cost of food and soft drinks have gone up 12.6% in a year, reflecting not only global supply problems, but also the massive pressure on farmers who are struggling with staff shortages and rising input costs across the board. Prices are also hit by rising energy and transport expenses at every stage in the process.

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “Anyone on a tight budget has had to wrestle with alarming rises in the cost of some staples – with milk prices up more than a third, and flour, butter and pasta all up around a quarter in a year. These are truly horrible hikes and are hitting people where it hurts.

“In the ONS surveys, food has always topped the list for the rises that people feel most keenly, and is second only to energy as the cost that keeps them up at night. It’s why, at the end of July, two in five people were trying to cut back on food and essentials.”

Laura Suter, head of personal finance at AJ Bell, said: “Even though the energy price cap hasn’t moved since April, electricity and gas prices still drove the inflation figure higher because the comparison is with last July. During that time gas prices have risen by 96% while electricity has shot up 54%.

“And once again petrol prices drove inflation higher. Despite prices at the pump falling through July they still remain higher than a year ago and have a long way to fall before they return to previous lows. So, while filling up a tank isn’t as painful as it was a few months ago, the impact on the inflation figure is still being felt.”

StepChange said the cost of living is now the number one reason for new clients’ debts, with the debt charity renewing its calls for more help from government for those on low incomes.

Phil Andrew, StepChange CEO, said: “Bringing the uprating of benefits forward from April 2023 to September would be a welcome way to begin to support the most financially vulnerable, as would bringing in a new targeted financial package that matches the scale of the projected October price cap rise. We would also like to see a commitment to pausing unaffordable government debt deductions, which are already a cause of major hardship.

“Months of rampant inflation will have left many low income households staring down the barrel of debt and destitution. A clear and ambitious set of measures to save them this from this fate is needed, and fast.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Big flu jab price hikes this winter: Where’s cheapest if you can’t get a free vaccine?

Pharmacies, supermarkets and health retailers are starting to offer flu jabs ahead of the winter season, but t...

Is now the time to fix your energy deal?

Fixed energy tariffs all but disappeared during the energy crisis. But now they are back with an increasing nu...

Everything you need to know about the pension triple lock

Retirees are braced to receive another bumper state pension pay rise next year due to the triple lock mechanis...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

The best student bank accounts in 2023: Cash offers, tastecards and 0% overdrafts

A number of banks are luring in new student customers with cold hard cash this year – while others are compe...

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Money Tips of the Week