LONDON – The biggest jump in food prices since 1980 pushed British inflation back into double digits last month.

It matched a 40-year high hit in July, and is a new blow for households grappling with the cost-of-living crisis.

The Office for National Statistics (ONS) said the consumer price index (CPI) increased by 10.1 per cent in annual terms in September. A Reuters poll of economists had pointed to a reading of 10 per cent, after a 9.9 per cent rise in August.

The figures hammered home the difficult environment for British households, especially those on the lowest incomes. They are facing new uncertainty about the extent of financial support available to them after recent government U-turns.

The Bank of England will also feel pressure to step up its interest rate hiking campaign in November in the light of Wednesday’s data.

Food and non-alcoholic beverage prices were the biggest driver of inflation in September. They rose by 14.5 per cent, the biggest jump since April 1980, according to historic modelled estimates of the CPI.

Hotel prices also increased in September, the ONS said.

“Today’s release highlights the danger that underlying inflation remains strong, even as the economy weakens,” said Mr Paul Dales, chief UK economist at consultancy Capital Economics. He pointed to rising core inflation, a measure that excludes volatile food and energy prices, which hit a new 30-year high of 6.5 per cent.

The September inflation figure is used as a reference point for the “triple lock” indexing of state pensions. But pensioners are yet to hear a clear answer from the government about whether they will rise in line with prices next year.

Government support for household and business energy bills is also in doubt after new finance minister Jeremy Hunt limited the scope of the programme.

Many households face rising costs as a direct result of the financial market fallout from Prime Minister Liz Truss’ economic growth agenda, which Mr Hunt largely reversed on Monday, in a drive to restore shattered investor confidence in Britain.

Even without the recent political and financial turmoil, Britain has been hit hard by the surge in European natural gas prices caused by Russia’s invasion of Ukraine.

It has added to post-Covid-19 supply chain bottlenecks and labour shortages, creating an intense squeeze on living standards. REUTERS