Soaring food prices drive UK inflation back to double digits – business live

Graeme Wearden - 19 Oct 2022

CPI inflation has jumped to 10.1% in September, but unclear whether government will raise pensions and benefits in line with prices.

Inflation in the UK has risen above 10% for the second time this year as households come under pressure from the sharpest annual rise in food prices for more than 40 years amid the cost of living crisis.

The Office for National Statistics (ONS) said the consumer prices index rose to 10.1% in September, returning to double digits after a slight dip to 9.9% in August. The figure was last higher in 1982. City economists had forecast a slightly smaller rise to 10%.

Soaring prices for food and drink were the biggest driver behind the latest cost of living increase, with an annual rise of almost 15%, the fastest annual jump since April 1980, as the price of bread and cereals, meat, milk, cheese and eggs shot up.

The September inflation figure is crucial as it is the one used to uprate pensions and benefits for the following April. However, there have been suggestions that the new chancellor, Jeremy Hunt, will break the Conservative party manifesto commitment to the triple lock – the guarantee that state pensions rise each year in line with inflation, average wage growth, or 2.5%, whichever is highest.

Charities warned that failure to deliver an inflation-matching benefits increase, after the biggest real-terms cut for 50 years earlier this year, would drive up poverty.

Rebecca McDonald, the chief economist at the poverty charity the Joseph Rowntree Foundation, said:

“It is morally indefensible that the government should still be considering leaving people with even less ability to pay for what they need.”

Here’s the full story:
Related: UK inflation rises to 10.1% on back of soaring food prices

Pensioners 'face disaster' if triple lock abandoned

If the government sticks to the triple-lock pledge, then the new full State Pension would rise by a record 10.1% to £203.85 a week from April 2023, from £185.15 currently.

For those who reached state pension age before April 2016, the basic State Pension could increase from £141.85 to £156.15.

But if ministers abandon that promise, and uprate pensions by average earnings not inflation, pensioners would only receive a 5.5% rise.

That would take the full State Pension up to £195.35 a week, and the basic state pension to £149.65.




As it is almost impossible to predict the direction of travel of government policy, it’s very difficult for pensioners to plan with any kind of certainty, says David Denton, technical consultant at Quilter Cheviot:

Former Chancellor, Rishi Sunak, had backed keeping the triple lock in place and during her leadership bid, Liz Truss also gave the impression that the State Pension triple lock will remain in place.

The policy has now been thrown up in air again after Jeremy Hunt appeared indecisive on the matter.

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, says losing the triple lock would be a bitter blow to the many pensioners who rely on the state pension.

Many of them will be have been under severe financial pressure in recent months as inflation pushed their essential bills ever skyward. Their difficulties will have been compounded by the triple lock’s suspension last year with the 3.1% increase given being no match for the events that followed.

However, faced with a black hole in Britain’s finances Jeremy Hunt is looking at making savings wherever possible and suspending the triple lock could save him a huge chunk of change -it will however be a disaster for pensioners already facing difficult times.”

Hunt: we'll prioritise "help for most vulnerable"

Chancellor Jeremy Hunt has said the government will prioritise help for the most vulnerable, after inflation rose to 10.1%.

In a statement, Hunt says:

I understand that families across the country are struggling with rising prices and higher energy bills.

“This Government will prioritise help for the most vulnerable while delivering wider economic stability and driving long-term growth that will help everyone.

“We have acted decisively to protect households and businesses from significant rises in their energy bills this winter, with the Government’s energy price guarantee holding down peak inflation.”

However, there’s no mention of whether the chancellor will raise benefits in line with this inflation reading.

Also, Hunt has just limited the goverment’s energy price freeze to just six months, from two years. That means average annual energy bills could rise to more than £4,000 from April, adding to inflation next year.

Related: Average energy bill forecast to hit £4,347 after Truss U-turn on support

TUC: Truss and Hunt must end anxiety of millions over universal credit, pensions and benefits

TUC general secretary Frances O’Grady is urging Liz Truss and Jeremy Hunt to guarantee that benefits will rise in line with September’s inflation reading:


“With inflation still running high, the government must make sure that every family can afford to put food on the table and keep warm this winter.

“But millions of people are already skipping meals and turning off the heating. Yet the Prime Minister and Chancellor still refuse to confirm that universal credit, pensions and benefits will keep up with inflation.

“It is no wonder so many working people are seeking higher wages and taking action to win fair pay deals.”

Personal inflation calculator: find out how UK price rises affect you

Although inflation is officially 10.1%. you could have a different, personal inflation rate depending on what you typically buy each month.

This is because some items have gone up by more in price than others – the ONS uses a basked of goods to assess the rising cost of living.

We’ve built a calculator that lets you find your personal inflation rate, here:

Related: Personal inflation calculator: find out how UK price rises affect you

Food inflation in detail

Food prices jumped 14.8% over the last year, driven by staple goods such as bread and cereals (up 14.5% over the last year), pasta and couscous (+22.7%), meat (+15.3%), low-fat milk (+42.1%), butter (+28%) and eggs (+22.3%).

Fruit prices were up 8.8%, while potatoes cost 19.9% more,

Crisps rose 11.8%, while jams, marmalades and honey cost 28.1%.



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