Inflation according to the customer prices index has risen to 10.1% in the 12 months up to July, up from 9.4% in June, says the Office for National Statistics.

Food prices, energy bills, petrol and diesel were all leading contributors to the highest increase in inflation in 40 years.

The ONS statistics show that food and non-alcoholic drinks were the most significant contributors to rising prices.

Transport costs also contributed to the rise, with airfares, international rail tickets and the prices of package holidays all going up.

Recent forecasts from the Bank of England suggest that inflation would surpass 10%, but the rise into double digits was not expected for another couple of months.

The Bank has said inflation could peak at just over 13% in Q4 2022 before falling back to the target of 2% in 2024.

Suren Thiru, economics director for the Institute of Chartered Accountants in England and Wales (ICAEW), said:

"Red-hot inflation is suffocating the UK economy, and with the peak some way off, the risk of recession is rising.

"The latest increase means that the cost of living crisis is escalating as inflation continues to outstrip pay and growth, eroding people's incomes.

"Companies' ability to operate is also under significant pressure as they see their own costs surge and customer demand wilts."

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