UK inflation fuels cost of living crisis

International Business News – Last week, the UK Office for National Statistics released data showing that the UK consumer price index (CPI) rose 9.9% year-on-year in August, a slight drop from the 10.1% rise in July, as auto fuel inflation eased. Still, the figure is more than three times higher than the same period in 2021 (3.2%) and nearly five times higher than the government’s inflation target (2%).

In fact, lower vehicle fuel prices cannot offset the impact of higher food prices. In August, food prices in the UK rose for 13 consecutive months, with an increase of 13.1%, a 14-year high, especially for milk, cheese and eggs, which may exacerbate the cost of living crisis in the UK.

According to market research firm Kantar, the annual average household spending on food in the UK is £5,181, up 12.4% (£571). To cut costs, British households are targeting affordable supermarkets where goods are more affordable. According to the BBC, as of early September, the sales of affordable supermarket Aldi in the UK in the past 12 weeks increased by nearly 20% compared with the same period last year, and its market share surpassed the supermarket chain Morrisons to become the fourth largest supermarket in the UK. At the same time, the sales of private label products launched by supermarket merchants increased by more than 30% compared with last year due to cheaper prices.

In addition to food prices, the British people have to deal with expensive energy expenses in winter.

Earlier, the British energy market regulator (Ofgem) announced that the energy price ceiling in October this year may rise to a staggering 3549 pounds. In this regard, AFP cited the views of charitable groups, assuming that in the coming months, if the inflation rate as predicted by the Bank of England reached 13%, coupled with soaring energy costs, many British families will spend the “most miserable Christmas”, they have to choose between food and heating.

To deal with this situation, the newly appointed British Prime Minister Truss on September 8 announced a cost of more than 100 billion pounds of “energy price guarantee” mechanism, the annual cap on household energy bills set at 2,500 pounds. In comparison, British families last year, the annual cap on energy bills is only 1138 pounds, even with the guarantee mechanism, for many British families, this winter’s energy spending will still be a considerable expense. According to the British media, “The Guardian” reported that an interviewer said that if the annual cap on household energy bills is 2,500 pounds, then his monthly household expenses will be only 200 pounds, to buy food, baby supplies and gasoline budget of only 50 pounds.

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