Rising food prices drive Britain into double digit inflation

CPI inflation hit double digits (10.1 per cent) in July, with Resolution Foundation analysis of the latest data today (Wednesday) showing that it was even higher for the poorest tenth of households – at 10.9 per cent.

Another significant increase in inflation from 9.4 per cent in June to 10.1 per cent in July was driven by primarily by rising food prices, which are rising at a rate of 12.7 per cent (up from 9.8 per cent June). This is the highest monthly increase since May 2001.

With poorer households spending a greater share of their budgets on food (and energy bills), the Foundation calculates that CPI inflation for the poorest tenth of households was 10.9 per cent in July, compared with 9.4 for the richest tenth of households – a cost of living gap of 1.5 percentage points.

The Foundation’s calculations are consistent with the ONS’ own distributional analysis of CPIH inflation between April and June, which also found that inflation was highest for those in social rented accommodation, compared to owner occupiers and those in private rented accommodation.

James Smith, Research Director at the Resolution Foundation, said:

“Inflation has hit double digits earlier than expected off the back of the highest food price inflation in over two decades, and is set to continue climbing as energy bills soar this winter.

“There is no escaping this cost-of-living crisis, with pay packets shrinking at their fastest pace since 1977, and low-income households facing the prospect of cutting back ‘non-essential’ spending by 25 per cent to cope with energy bills of over £4,000 from January.

“It will take many months, and much more living standards pain, before inflation starts to ease. So, the number one priority for the next Prime Minister will be to offer significant support to help millions of families through a brutal winter and beyond.”