UK inflation tops 10%, highest in 40 years

(Boursier.com) — As expected, consumer prices continued to rise sharply in the United Kingdom. According to data released by the National Statistics Office, annual inflation stood at 10.1% in July after 9.4% the previous month, and against a consensus of 9.8%. Inflation had not reached such a high level for 40 years across the Channel. The Central Bank expects inflation to top 13% later this year when regulators allow energy bills to rise again. Annual ‘core’ inflation, which excludes the most volatile elements, stood at 6.2% against 5.8% in June, and 5.9% expected. Sequentially, the ‘core’ CPI rose 0.3% against 0.2% consensus.

Economists are increasingly pessimistic about the UK, with the risk of a recession now seen as much more likely than not due to mounting cost pressures. Yesterday’s jobs figures showed that real wages, ie adjusted for inflation, had fallen 3% in the three months to the end of June, the fastest pace since the statistic was created in 2001. BOE expects a recession to begin in the fourth quarter and continue through early 2024.