Inflation in the UK rises to a record high of 10.1 percent

British consumer prices rose in July at their highest rate since early 1982, surprisingly topping the 10 percent mark. Goods and services cost an average of 10.1 percent more than a year earlier, the Office for National Statistics said on Wednesday in London. Economists polled by Reuters had expected inflation to remain in single digits at 9.8 percent, the same as in June, when consumer prices rose 9.4 percent. The island's renewed surge in inflation is fueled by skyrocketing energy costs and supply chain problems.

The rapidly rising cost of living, which is also likely to be fueled by the foreseeable further rise in energy bills, is putting the British central bank under pressure. The Bank of England (BoE) recently took the biggest interest rate hike in 27 years to keep inflation in check.

UK retail prices rose 12.3% year-on-year in July - the highest since March 1981. From June to July they rose 0.6%. "Getting inflation under control is my top priority," Finance Minister Nadhim Zahawi said after the price data was released. In addition to an independent monetary policy, responsible tax and spending decisions also played a role, as did reforms to promote productivity and growth.

The British economy already shrank slightly in the spring. Gross domestic product (GDP) fell by 0.1 percent from April to June compared to the previous quarter. The central bank fears that the economy will slip into a deep recession and that inflation will exceed the 13 percent threshold in October.

According to a forecasting institute, consumers will also face massively rising costs in the course of the energy crisis in winter. Accordingly, the state price cap for the average annual energy bill is likely to be raised to more than £4,200 in January, an increase of 230 percent on the same month last year.

In the fight against the rapidly rising prices, the BoE recently raised the key interest rate by half a percentage point to 1.75 percent. Higher interest rates are intended to prevent the rise in inflation from taking root in the economy and thus causing wages and prices to continue to rise. BoE boss Andrew Bailey is keeping all options open for the upcoming central bank meeting in mid-September. Monetary policy is not on a predetermined path, he emphasized after the latest interest rate decision.