Inflation crisis wipes out 16 years of pay growth
FTSE 100 edges higher after inflation data
Ben Marlow: Our out-of-touch water watchdog is drowning in denial
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Inflation has surged into double digits for the first time in 40 years, piling more pressure on households as they brace for another jump in energy bills.
The consumer price index rose by more than expected to hit 10.1pc last month, according to figures from the Office for National Statistics. That's up from 9.4pc in June and marks the highest level of inflation for more than four decades.
Core inflation, which strips out volatile food and energy costs, hit 6.2pc. The retail price index, which is used for pricing some public services including train fares, rose to 12.3pc.
Meanwhile, the producer price index soared to 17.1pc - its highest since 1977 - in a sign of further inflationary pain to come.
The figures suggest there will be no let-up for British families battling the cost-of-living crisis, with the Bank of England warning that inflation will peak above 13pc later this year.
Food prices were the biggest driver of inflation in July. It comes after figures released by Kantar yesterday showed annual grocery bills will rise by £533 this year as food prices increase at the fastest rate since the financial crisis.
Another sharp increase in the energy price cap is also expected to plunge the UK into a year-long recession and spark the biggest fall in living standards since records began in 1963.
The latest inflation figures will fuel speculation of further sharp interest rate rises after the Bank raised rates to 1.75pc earlier this month. That was its sixth consecutive increase and the biggest in 27 years.
Hundreds of thousands of UK households ditch Amazon Prime
IYCMI - Almost 600,000 British households cancelled their Amazon Prime subscriptions ahead of a price rise as the cost of living crisis hits streaming companies.
Ben Woods has more:
Read Ben's full story here
Germany will run out of gas in three months if Putin turns off taps
Germany may be racing to fill up its gas reserves, but the country will still struggle to get through the winter.
Even if Germany can meet its target of filling its inventories to 95pc by November, that would only last for about 2.5 months, the president of the country's energy regulator said.
Klaus Mueller, president of the Federal Network Agency, told Bloomberg: "We are a little bit faster than what we used to be in terms of filling up storage, but it is not a sign we can relax...
"I cannot promise you that all storage facilities in Germany will be 95pc full in November, even under good supply and demand conditions. In the best-case scenario, three-quarters of them will meet the target."
Stockpiles are currently 77pc full, which is two weeks ahead of schedule. However, Germany's energy crisis looks set to deepen and the Government has warned of rationing over winter.
Manchester United shares surge after Elon Musk takeover 'joke'
Elon Musk is at it again.
The Tesla billionaire, who's known for his reckless tweets, announced on Twitter last night that he was buying Manchester United. He let 4.5 hours pass before clarifying it was a joke.
Shares in the football club surged as much as 17pc in pre-market trading, before paring gains to trade around 3pc higher.
Read more: Elon Musk says he was 'joking' about buying Manchester United from the Glazers
Interest rates may need to hit 4pc, says Andrew Sentance
The Bank of England may need to more than double interest rates by the end of this year to get inflation under control, a former MPC member has said.
Andrew Sentance, who served at the Bank during the last financial crisis, said rates may need to rise to 3pc or even 4pc because policymakers have "fallen behind the curve".
He told BBC Radio 4: "The Bank of England has been quite slow in responding and is clearly behind the curve in trying to get on top of this surge in inflation.
"They don't have an easy job at the moment, but they do have tools at their disposal, particularly interest rates, and they've been rather slow in moving them upwards."
The comments were echoed by Stuart Rose, chairman of Asda and former boss of M&S. He took aim at the Government for failing to act immediately and criticised the two leadership contenders for focusing on tax cuts.
"Inflation is pernicious. It erodes wealth," he said. "I want to look after those people who cannot afford to take the hit, and we know who they are.
"I don't think you can grow your way out of inflation. You need to kill inflation first. Of course you need to sew the seeds of growth. But you can't do both."
Cineworld shares plummet as it warns shareholders face dilution
Cineworld shares have nosedived this morning after the company said it's considering rescue deals that could dilute shareholder value.
The cinema chain said it's in discussions to secure additional funding and potentially restructure its balance sheet. It warned the measure was likely to result in "very significant dilution" of existing equity interests.
Shares in Cineworld plunged as much as 42pc to a record low.
Meanwhile, the struggling cinema group also said audience numbers had been weaker than expected and warned they would stay low until November due to "limited" film releases.
The debt-laden company, which also owns the Picturehouse chain, had been pinning its hopes on films including Top Gun: Maverick and The Batman, but said recent admissions had been lower than expected.
FTSE risers and fallers
The FTSE 100 has edged higher this morning after new figures showed inflation surged by more than expected into double figures.
The blue-chip index rose 0.1pc in early trading, propped up by banking stocks.
Lloyds gained 0.8pc, while Barclays was up 0.9pc as traders increased their bets on aggressive interest rate rises by the Bank of England.
The domestically-focused FTSE 250 was also up 0.1pc. Cruise operator Carnival jumped more than 6pc after it said booking activity nearly doubled pre-pandemic levels following an easing of Covid testing rules.
Ladbrokes owner handed record fine over gambling failures
Away from inflation gloom, the owner of Ladbrokes has been handed a record fine for failing to meet gambling standards.
Entain, which also owns Coral, was hit with a £17m penalty from the Gambling Commission due to "serious failures" in social responsibility and anti-money laundering.
Andrew Rhodes, chief executive of the regulator, said that further serious breaches of the rules would make the remove of Entain's licence "a very real possibility".
It's the second time the company has been fined. Ladbrokes and Coral were fined £5.9m before being taken over by GVC, which was renamed Entain in 2020.
A spokesman for the gambling group said: "Entain has entered into the regulatory settlement with the Commission in order to bring the matter to a close and avoid further costly and protracted legal proceedings."
Which prices are rising fastest?
The latest stats show inflation has set in across the economy, with a broad range of goods and services suffering from higher prices.
Szu Ping Chan breaks down the products that have seen the biggest price rises, as well as those that have go cheaper:
Reaction: Income squeeze will be difficult to ignore
Hussain Mehdi at HSBC Asset Management says more support for households is needed, but this still won't avert a recession.
FTSE 100 opens higher after inflation data
The FTSE 100 has shrugged off the latest inflation figures to push higher at the open.
The blue-chip index ticked up 0.1pc to 7,544 points.
Chancellor: I understand times are tough
Here's what Chancellor Nadhim Zahawi has to say about the latest inflation figures:
Reaction: Policymakers stuck between rock and hard place
Mike Bell at JP Morgan Asset Management warns the continued wage growth poses a dilemma for policymakers.
Reaction: Not all bad news
FX analyst Viraj Patel chimes in with some much-needed optimism, pointing out that it's not all bad news in the latest numbers.
He says that prices in some categories actually fell month on month, but still contributed to annual inflation due to comparisons against last year, when the UK was emerging from lockdown.
PwC: Things are going to get a lot worse
Kien Tan, director of retail strategy at PwC, warns the strain on household budgets is only set to get worse.
Reaction: BoE will stay in hawkish mode
Ruth Gregory, senior UK economist at Capital Economics, says the hotter-than-expected inflation figures are likely to prompt another big interest rate rise.
Pound rises after inflation surge
Sterling has pushed higher against the dollar after the sky-high inflation figures fuelled expectations of further interest rate rises.
The higher-than-expected consumer price index figure will pile pressure on the Bank of England to act aggressively. Earlier this month it raised rates to 1.75pc in the first half-point increase since 1995.
Traders are now betting that the Bank will double rates to 3.5pc by March.
The pound rose as much as 0.3pc against the dollar to $1.2113. Against the euro it was up 0.1pc at 83.93p.
Core inflation keeps rising
Aside from the headline figure, another worrying sign for the Bank of England is the continued rise in core inflation.
This measure strips out volatile food and energy costs, so gives an indication of how price rises are setting in across the wider economy.
Core CPI rose 0.6pc in July to an annual rate of 6.2pc. With food the main driving force behind inflation last month, it's clear the price pressures have become embedded.
Pressure mounts on Bank of England
The higher-than-expected inflation figure will add more pressure on the Bank of England to keep raising interest rates to keep a lid on price rises, writes my colleague Szu Ping Chan.
ONS: Price rises wide-ranging
Grant Fitzner, ONS chief economist, said:
Food drives prices higher in July
Once again, surging energy bills are one of the main driving forces behind surging inflation.
But the data shows food was the biggest factor behind the jump in prices in July as Brits were forced to splash out more on their supermarket shop.
The largest movements came from bread and cereals (0.06 percentage points), milk, cheese and eggs (0.05 percentage points), and vegetables (including tubers), meat, sugar, jam, honey, syrup, chocolate and confectionary, which each contributed 0.04 percentage points to the change in the annual rate.
Inflation surges by more than expected
The numbers are in and they're even worse than expected.
Inflation has soared into double figures, with the consumer price index hitting 10.1pc in July. That's more severe than the 9.8pc economists had been predicting.
Inflation hits fresh 40-year high
We start the day with another set of eye-watering inflation figures highlighting the escalating cost-of-living crisis.
The consumer price index rose to 10.1pc in July - up from 9.4pc the previous month and the highest in four decades, according to the ONS.
Core inflation, which strips out volatile food and energy costs, hit 6.2pc. The retail price, which is used for pricing some public services including train fares, rose to 12.3pc.
The numbers highlight the strain on British families, with inflation forecast to surge above 13pc later in the year after another jump in energy bills.
The Bank of England has also warned that the UK will be plunged into a deep recession, with households facing the biggest fall in living standards on record.
5 things to start your day
1) Hundreds of thousands of UK households ditch Amazon Prime Cost of living crisis hits streaming companies hard, according to Ofcom report
2) Chaos in corporate Britain as wages crash despite record job vacancies Companies consider one-off bonuses in fight for talent as inflation eclipses pay rises
3) World's biggest airline orders 30 'son of Concorde' supersonic jets Boom planes are predicted to fly from London to New York in three and a half hours by 2030
4) Aldi to overtake Morrisons as UK's fourth largest supermarket Cost of living crisis forces shoppers to switch grocery shops
5) Russian gas exports slump by a third in blow to Putin Gazprom could be forced to close gas fields as it struggles to divert supplies to China
What happened overnight
Tokyo stocks opened higher this morning, with the benchmark Nikkei 225 index up 0.4pc in early trade and the broader Topix index climbing 0.5pc.
Hong Kong shares started with healthy gains following a positive lead from Wall Street. The Hang Seng Index added 0.8pc.
While the Shanghai Composite Index inched up 0.1pc and the Shenzhen Composite Index on China's second exchange also rose 0.1pc.
Coming up today
Corporate: Balfour Beatty, Essentra, Persimmon (interims)
Economics: Inflation (UK), central bank decision (New Zealand), retail sales, Fed minutes (US)