UK inflation rate rises to 10.1% as food and energy prices continue surge

LONDON — The consumer price index rose 10.1% in September, according to estimates published Wednesday by the Office for National Statistics, just exceeding a consensus forecast among economists polled by Reuters.

Reuters estimated an increase of 10% for September.

U.K. inflation rose in the year to September 2022 as the country’s cost-of-living crisis continues to hammer households and businesses ahead of a tough winter. Inflation unexpectedly dipped to 9.9% in August, down from 10.1% in July, on the back of a fuel price decline.

Increasing food prices were the biggest contributing factor to inflation in September, up 14.6% year-on-year. Transport was up 10.9% compared to last year, while the price of furniture and household goods rose 10.8%.

Sterling fell against the dollar following the news, trading at $1.1289, down from $1.1330.

The inflation data will also impact the Bank of England’s approach for the near term, just as the Bank plans to sell off some of its government bonds, known as gilts, from Nov. 1.

September’s inflation rate highlights the severity of the U.K.’s inflation crisis, and comes as the country weathers a period of economic volatility.

On Monday the new British Finance Minister Jeremy Hunt reversed the majority of the tax cuts introduced by his predecessor, Kwasi Kwarteng, on Sept. 23, and Prime Minister Liz Truss apologized for “mistakes” that had caused severe market turbulence.

Questions are now being raised over how long Truss will remain in office.

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