Summary

  • The UK inflation rate has hit double digits - 10.1% - the Office for National Statistics says

  • It's a higher rate than analysts were predicting - the last time price rises were in double digits was in February 1982

  • Rising food and drink prices made the biggest contribution to the change in the inflation rate between June and July

  • Bread, cereals, milk, cheese and eggs had a particular impact on rising prices

  • But the cost of living is rising across the board, driven partly by energy costs and the Ukraine war but also factors such as the cost of raw materials

  • Meanwhile, average wage increases are falling behind, with the average salary buying 3% fewer goods and services than a year before

  • Inflation is expected to continue rising this year, with the Bank of England predicting it won't go down to the target 2% for about two years

Live Reporting

Edited by Nathan Williams

  1. Latest on wages - what we learnt yesterday

    Person with a wallet (stock image)

    Yesterday we told you pay has fallen further behind the rising cost of living, according to official data.

    While average wages rose 4.7% between April and June, that was outpaced by inflation which is growing at a much faster pace.

    As a consequence, the “real value” of pay fell by 3%, according to the Office for National Statistics. That means the average wage buys 3% less goods and services that it did the year before.

    The gap between pay growth and inflation is the biggest since records began more than 20 years ago.

  2. 'More cost of living pain': Wednesday's newspaper front pages

    Financial Times

    The Financial Times reports that Tuesday's pay figures from the Office for National Statistics "will provide little comfort that inflation is coming under control".

    Economists tell the paper that despite pay falling at its fastest rate on record, when adjusted for inflation wage growth "has more momentum than the Bank of England can tolerate", and this will put pressure on officials to raise interest rates again next month.

    The Times calls the figures "grim" and says that "low paid workers will bear the brunt" of the slowdown in growth and rising interest rates.

    The Sun says that despite the drop "the nation will be forced to wait several weeks more for a new prime minister to take charge".

    Read more from our round-up of the papers

  3. How inflation has changed over the past 10 years

    Inflation

    Inflation this high is disastrous for the personal finances of millions of households, especially as food prices are surging, our economics editor Faisal Islam pointed out earlier this year.

    "Squeeze" doesn't quite capture how some working families are seeing their entire disposable income wiped out by monthly energy direct debits, or turning up at supermarkets asking the cashiers to stop the till at £30 or £40, he said.

  4. What is inflation?

    MilkGetty Images

    Inflation is the increase in the price of something over time.

    For example, if a bottle of milk costs £1 and that rises by 5p compared with a year earlier, then milk inflation is 5%.

    Every month a figure is released, estimating how much prices are rising overall - it's currently at 9.4%.

    The Bank of England has warned that inflation could reach 13% and has predicted a recession by the end of the year.

  5. Welcome to our live coverage

    Inflation (stock image)Getty Images

    Good morning and thanks for joining our live coverage as we await new figures expected to confirm another hike in the UK’s rate of inflation.

    So what do we already know about inflation in the UK?

    • In June inflation - or price rises - reached 9.4%, the highest level in 40 years
    • The official figure for July - as measured by the Consumer Price Index - is expected to have jumped even higher. The Bank of England predicts that it could go up to just over 13% by the end of the year because of the rise in energy prices
    • The cost of living, fuelled by rising energy and food prices, is expected to keep going up this year
    • As costs go up, businesses are charging more, but wages have been struggling to keep pace
    • The bank predicts inflation will fall to 2% in roughly two years time, but while it is high the bank come under pressure to act and economists are predict it may raise interest rates again by another half a percentage point next month

    We’ll have analysis and unpack what it all means for you.