Inflation hits double figures and reaches new 40-year high

UK inflation has hit yet another 40-year high with the increase exceeding predicted rises, but the Tory Party is still not going to do anything about it, at least until Boris Johnson leaves.

The Consumer Prices Index (CPI) rose from 9.4 per cent in June to 10.1 per cent in the 12 months to July, Office for National Statistics (ONS) data revealed. This is the highest inflation has been since February 1982.

The new inflation rate is even higher than the 9.8 per cent figure predicted by most economists, and signals an even tighter squeeze for millions of Brits trying to make ends meet amid the cost of living crisis.

It comes after wages fell at the fastest rate since records began, dropping 3 per cent after inflation between April and June, ONS figures revealed earlier this week.

Despite this, Boris Johnson‘s spokesperson has said there will be no further government intervention before the Tory leadership race ends of September 5.

Sir Keir Starmer told Sky News on Monday that Labour’s plan to deal with the cost of living crisis would avoid people paying “a penny more” on their winter energy bills and would save the typical family £1,000 straight away. It would involve keeping household bills down by freezing the energy price cap, and would be paid for by introducing a new windfall tax on oil and gas companies’ profits without the “major tax loophole” the government windfall tax has.

Sir Keir said the six-month plan “to get us through the winter” would pull inflation down by “about 4 per cent”. The plan has been criticised for helping everyone with their bills, as opposed to just low-income households, but the Labour leader argues this would help lower inflation. He said a new plan would be needed in April 2023 when the situation is likely to have changed.

Tory leadership candidates vary in their approaches to tackling the cost of living. While Rishi Sunak has unveiled a plan to reduce energy bills for up to 16 million vulnerable people, Liz Truss has said cutting taxes is the best way to help, but has dismissed calls for a windfall tax on oil and gas firms’ profits.