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Inflation back in double digits as speculation mounts over triple lock U-turn

by LLB Reporter
19th Oct 22 11:46 am

Inflation rate has returned to 10.1% as the cost-of-living crisis escalates, official figures out today showed.

Food costs rose for the 14th month in a row – 14.6% is the highest rate since 1980.

September’s inflation rate is normally used to uprate pensions and benefits but there are big questions about government plans.

Danni Hewson, AJ Bell financial analyst, comments on the latest UK inflation figures: “Making household budgets stretch to cover the basic necessities of life has become harder and harder. Cutbacks have already been made. Big name brands ditched for value lines in the weekly food shop, thermostats have been dialled down, non-essential journeys put off or abandoned altogether.

“The fact that food and energy costs were the main drivers for September’s renewed spike won’t surprise anyone. Staples like bread, cheese, milk and cereals shot up at a pace many people will never have experienced. And even before winter’s cold fingers grab hold of our purse strings people are having to pay more to cook that food, with some households declaring ovens no-go areas.

“The government’s curtailed energy price guarantee will be a massive help when it kicks in next month, but prices are still set to rise and that will make day to day decisions even tougher and keep that inflation number in these uncomfortable double digits.

“There are a few bright spots in today’s figures; the price at the pump has fallen which is good news for motorists and good news for transport costs. There are also tentative signs that producer prices might have settled with both the cost of materials going in and goods coming out falling a little in the year to September.

“But there are worrying signs that inflation has become entrenched in the service sector with the rate that prices have risen by reaching the highest levels since ONS records began in 1999.

“Every story is different because every basket of goods is different. Think about where you spend your money, where you’ve seen prices rise. The Office for National Statistics has created a handy calculator to allow all of us to figure out our own unique inflation rate.

“Seeing that number in black and white might not be the most appealing use of time and most people are doing their own sums. Whether it’s using old fashioned pen and paper, only spending the cash in your wallet or relying on smart banking apps, people are trying to take control.

“But there are things people can’t control, things like the uprating of benefit and pension payments due to come next spring, just in time for the end of those energy price measures. And fear is palpable, people are confused and increasingly angry.

“Businesses are also worried. They’re fighting their own cost battles and dealing with falling consumer confidence and dwindling discretionary spend. They’re also eyeing today’s inflation number with some trepidation and considering what it’s going to do to their business rate costs.

“The new chancellor has said there will be difficult decisions ahead. But for many those difficult decisions are already being made every day.”

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