UK inflation - the rate at which prices are rising - jumps to 9.4% in the year to June
Prices are continuing to rise at their fastest rate for 40 years, driven by petrol, energy and food costs
Poorer household are being hit harder by rising costs, the Resolution Foundation think tank warns
However, the government is confident we will see a "marked improvement" in 2023, a treasury minister says
Labour pushes for urgent action from the government, calling for it to take VAT off energy bills
We are answering some of your questions on the rising rate inflation rate and the cost of living
And, as part of our Counting the Cost of Living series, BBC News will be asking people from towns and cities around the UK how they are coping - and revisiting them over the coming months
We're starting today in the Midlands with Derby, hearing from households, businesses and families
That's it from us today - thanks for following our live coverage.
Today's page was edited by Nathan Williams and Owen Amos and written by Becky Morton, James FitzGerald, Katie Thompson and Thomas Mackintosh.
Image source, Getty ImagesWe'll be bringing our live coverage to a close shortly, so here's a reminder of the main developments today:
Image source, Getty ImagesDisruption caused by strike action on the railways is set to continue
The UK is experiencing a "summer of discontent", with strike action happening amid the cost-of-living crisis.
Image source, Getty ImagesThe latest jump in the inflation rate is just the start of a "financial catastrophe", according to consumer champion Martin Lewis.
Household fuel bills are set to "rocket" following a change to the energy price cap in the autumn, he tells BBC Radio 4's World at One programme.
The Money Saving Expert founder calls the timing of the Conservative leadership contest "devastating". He says millions of people will be hit by energy bill hikes not long after a new prime minister is in office.
Lewis claims fuel discounts announced by the government in May are "no longer fit for purpose" because they were based on an underestimate of how much prices would rise.
He calls for a change in the way the energy price cap is regulated – or for the tax system to take on the financial burden.
Christine and Mel are worried prices will rise more
In Derby, pensioners Christine and Mel Simpson receive food parcels when they need them from a local food hub.
But they worry that things will get worse later in the year.
"I think it depends on how severe the winter's going to be and how much inflation's going to be. Balancing the two out - we just don't know," says Mel.
Image source, Rural Action DerbyshireBeverley says many people are struggling in Derbyshire
Beverley Parkeris chief executive of the charity Rural Action Derbyshire, which aims to tackle disadvantage in rural communities.
She says as the cost of living has gone up, people are having to make difficult choices about what they spend their money on.
"We've heard of people switching off their fridges, which doesn't really help from an energy saving point of view because the biggest part of your bill is the standing charge, but they think it will.
"It's a massive risk and we've heard of people getting food poisoning from eating food that's not been stored correctly."
Public transport in rural areas can also be expensive. "We've heard of people walking six miles to the food bank and six miles home," she says, because they can't afford the bus.
Image source, .Throughout today we've been bringing you reaction to the latest interest rate hike from Derby.
The city is unique to its residents but it’s also quite average in various ways, making it a fairly typical example of what’s happening in the UK with the cost of living crisis.
We have middle-class families with parents employed by big firms like Rolls-Royce and Toyota but also record numbers using foodbanks. In comparison to other places, salaries compare favourably to house prices, but many are struggling.
Located in the Midlands, being on the Midland Mainline and CrossCountry line and just off the M1, Derby is well connected. It doesn’t have the wealth or expense of bigger cities but nor does it have the unemployment issues seen elsewhere.
Image source, .
Image source, Getty ImagesLower-income households spend a greater proportion of their money on essentials like heating
As the cost-of-living crisis bites, the Resolution Foundation claims the UK’s very top earners have seen their pay rise above inflation – while those at the bottom have seen theirs cut in real terms by 6%.
The result is a growth in the “wealth gap”, says Jack Leslie, a senior economist at the think tank, which "focuses on improving living standards for those on low to middle incomes".
“The better-off are doing particularly well at the moment,” Leslie tells BBC Radio 4’s World at One programme.
Lower-income groups spend a higher proportion of their income on essentials like food and heating – so inflation hits them hardest, Leslie says.
Connor Gillies
Consumer Affairs Correspondent
Food price increases are relentless for people in the rural Perthshire village of Pitlochry.
But this community is helping each other out with free food supplies in an open shed.
Allan Chilton, 30, arrived to grab some eggs off the shelves before heading to the supermarket for his weekly supplies. It saves him a few pounds. Every penny counts with household pressures mounting.
The quirky idea, known as the "community larder", is open 24 hours a day allowing people to come anytime.
It’s a two way process too with folk dropping off any excess food they aren’t planning on using.
Clodagh Rice
Northern Ireland business correspondent
Businesses are also facing huge cost increases - forcing many to hike their own prices for customers.
Wilson's Country, a leading potato processor based in Portadown, Northern Ireland, is being hit by soaring energy costs.
Managing director Lewis Cunningham says: "Our electricity now compared to 2021 has doubled, and at one stage in the Ukraine war in February and March it tripled.
"And it's a very difficult cost to reduce as we need to have the machines on, we need to wash potatoes, pack potatoes and chill potatoes - and even more concerning is what the autumn might bring.”
“Unfortunately the costs have been elevated now at such a high level with no outlook on the horizon of any costs reducing that we are having to pass these costs on [to customers]," he adds.
Jacqui Trowsdale says the school is being stretched due to a rise in demand for school meals
Deputy headteacher of Allenton Community Primary School in Derby, Jacqui Trowsdale, says demand for school meals is up by 30% - with a massive increase in breakfast club in particular. It's gone from having 60 children to more than 90.
That's because they try to keep prices as low as possible for families.
"It serves children from very large families so it could be that it is cheaper to feed them here than at home," she says.
"We can offer a variation of foods too. It certainly supports our parents who need to go out to work."
Gemma Bull is struggling to save a house deposit due to the cost of living
Gemma Bull, a teaching assistant at the school, says she is having to prioritise where they buy food from and shop around at different supermarkets because of price hikes.
She has four children at the school and has seen her weekly food bill more than double.
"Children are resilient, especially at our school, parents as well," she says.
"Being able to offer breakfast club and after school clubs helps the parents. After school clubs are free and that helps parents in our community."
Noor Nanji
BBC News
Image source, Getty ImagesKaren Betts, chief executive of the Food and Drink Federation, believes everybody is going to see the price of their weekly shop rise.
But speaking to the BBC, she says food manufacturers are "doing everything they can" to try to contain price rises.
"Our industry knows that we have a responsibility to keep food affordable and to bear down on prices," she says.
"But equally, all food manufacturers are seeing enormous rises in the costs of their inputs, whether that's ingredients, energy, labour, raw material, and logistics, they are all really going up in price."
Ms Betts knows food and drink companies are "cutting costs internally" to limit passing on price rises to consumers.
"But obviously that there are limits to that," she explains. "All businesses need to remain viable. And so I think we will see price inflation continue for some months."
Q: Chris Barnes in Somerset asks why disabled people are being treated as "third-class citizens". He refers to the fact that his cost of living payment , externalis lower than for those on other types of benefit.
A: In September, people like Chris on disability benefits such as DLA or PIP will receive a £150 cost of living payment.
That is designed to reflect the higher energy costs many people with disabilities face. The £150 payment is not dependent on income.
Those who also receive other so-called means-tested benefits, such as Universal Credit, will receive the £650 payment on top. (Note that the £650 is paid in two instalments.)
The adequacy of these payments is hotly-debated - not least because domestic energy bills from October are now forecast to be even higher than previously thought.
Image source, Getty ImagesOne way to try to control rising prices - or inflation - is to raise interest rates.
This increases the cost of borrowing and encourages people to borrow and spend less. It also encourages people to save more.
Analysts say the Bank of England is under pressure to raise interest rates by half a percentage point at its next policy meeting in August.
But it's a tough balancing act, as the Bank does not want to slow the economy too much.
Since the global financial crisis of 2008, UK interest rates have been at historically low levels.
They currently stand at 1.25%.
Kevin Peachey
Personal finance correspondent
Image source, Getty ImagesQ: Barrie Tucker asks: Why has the Bank of England "sat on its hands", waiting to hike interest rates in August?
A: Interest rates are set by the Bank of England’s Monetary Policy Committee (MPC) – a collection of nine economists.
They meet eight times a year.
Emergency rate rises are very rare, so the calendar is set, and their next decision will be made on 4 August.
Some commentators agree - to a degree - with Barrie, arguing that the Bank rate should have been pushed higher, earlier.
Last night, the Bank’s governor, Andrew Bailey, said the MPC was committed to doing what it can to get inflation back to its 2% target. That could include raising the Bank rate from 1.25% to 1.75% in August.
The Bank rate affects consumers in what they pay on loans, including mortgages, and what they receive in savings rates.
Kevin Peachey
Personal finance correspondent
We've been taking a number of your questions on the latest inflation rate rise.
Q: John Blanning asks: Why some prices are going up, when they have nothing to do with increases in the cost of grain?
A: Prices are rising at their fastest rate for 40 years as a result of a range of, often complex, factors.
The rising cost of fuel is one of those elements, as is the soaring price of energy, in part owing to the ramifications of the war in Ukraine.
Remember that, while households in England, Wales and Scotland have an energy price cap, businesses do not.
Raw material costs are also going up, often because of high demand as activity increased after Covid.
Businesses in some sectors are also having to pay higher wages to attract staff.
All this feeds through to higher prices paid by consumers.
You can read more here.
Fiona Trott
BBC News
Jennifer Snaith has had to close her salon for two days a week due to rising costs
From manicures to massages, rising costs are affecting every bit of Jennifer Snaith's business. She owns Bijoux Beauty in Sunderland and the increases can be measured by one important item – rubber gloves.
They used to be £7.99. Now, they’re £17.99. "It's not just the money, shopping around for the best price for PPE or beauty products takes time," she explains.
"Suppliers have increased delivery costs too. They used to be included but now they’re around £15 extra for next day delivery."
Her gas bills have also gone up by around 25% and in a busy salon that uses gallons of hot water, she’s had to change the way they work to keep their expenses down.
They closed for one day a week following the pandemic and now it’s two, with the same amount of customers coming in. Combined with an increase in their prices, businesswomen like Jennifer are having to think of smart ways to cope with the cost of living.
Kevin Peachey
Personal finance correspondent
Image source, Getty ImagesThe soaring cost of living means families are looking closely at their budgets, the resilience of their finances, and whether they have savings tucked away.
Lloyds Banking Group boss Charlie Nunn recently told BBC News that most customers have less than £500 of savings in their account.
The dilemma now is that savings are needed to deal with unexpected costs and bills as prices rise, but inflation is eating away at the value of those savings.
Financial information service Moneyfacts says interest rates offered by savings providers are improving, but – for an easy access savings account – the best rate is 1.6%. This is well below the inflation rate of 9.4%.
Rachel says her family is facing increasing energy and childcare costs
With many families struggling with soaring prices, a community food project in Derbyshire is helping people save money on their weekly shop. For a membership fee of £5 people can get around £50 worth of food.
Rachel, who has two children, lost her job as a childminder during the pandemic and although she is now working part-time she says the family is still finding things tough.
"We live hand to mouth all the time, there's no savings," she says. "So we're just living with whatever comes in, it goes out on bills and on food and on looking after the children."
Rachel says the community pantry is a massive help and is also encouraging her children to eat more fruit and vegetables.
Sue has been using the food pantry for three weeks
Sue Stephens also uses the pantry and says it has cut her food bill by £30-£40. At first she says she was embarrassed to ask for help.
"I felt like I was sort of gonna be scrounging I think if I came you know, because I work and I thought I shouldn't really be coming," she says. "But no, they said that's fine... because everybody's feeling the pinch."
Kevin Peachey
Personal finance correspondent
Julie, a parent carer for her disabled teenage daughter, receives Universal Credit and Carer's Allowance. She asks why the £650 cost of living payment is not given to those in receipt of Carer's Allowance.
Julie is not the only carer to have raised this point.
Somebody receiving Carer’s Allowance is not automatically eligible for the £650 cost of living payment, which comes in two instalments. Charities say several hundred thousand carers will miss out.
However, the government points out that 60% of working age people who get Carer’s Allowance will qualify for the payment because they are in a household which receives other types of mean-tested benefits, such as Universal Credit.
I’ve written an article on eligibility for cost of living payments here.
It is also worth stressing that some "hidden" carers who are entitled to Carer's Allowance do not claim it, so if you care for someone for at least 35 hours a week, it is worth checking.
Image source, House of CommonsThe issue of inflation was raised in the Commons earlier - during the final Prime Minister's Questions for Boris Johnson.
Labour leader Keir Starmer attacked the PM's track record on the economy - quoting Tory leadership candidate Penny Mordaunt as saying what's been going on "isn't working".
And the SNP's Westminster leader Ian Blackford later described the 9.4% inflation rate as one of Johnson's "record-breaking efforts in office".
Johnson repeatedly defended his performance, highlighting the post-Covid recovery and low unemployment.