UK inflation hit a 40-year high of 10.1% in September, piling pressure on households and businesses already struggling with the cost of living crisis.

The Office for National Statistics (ONS) said the rise in inflation was driven by a number of factors, including higher food and energy prices, as well as the ongoing war in Ukraine.

Food prices rose by 13.1% in the year to September, the highest rate since 1979. Energy prices rose by 54.5% in the year to September, the highest rate since 1982.

The rise in inflation is having a significant impact on households and businesses. Households are seeing their incomes squeezed as the cost of living rises faster than their wages. Businesses are facing higher costs for goods and services, which is putting pressure on their margins.

The Bank of England is expected to raise interest rates again in an effort to bring inflation down. However, this will also make it more expensive for households and businesses to borrow money.

What are the implications for households?

The rise in inflation is having a significant impact on households. Households are seeing their incomes squeezed as the cost of living rises faster than their wages. This is putting pressure on household budgets and making it difficult for some households to make ends meet.

What are the implications for businesses?

The rise in inflation is also having a significant impact on businesses. Businesses are facing higher costs for goods and services, which is putting pressure on their margins. Businesses are also having to raise wages to keep up with the rising cost of living, which is further adding to their costs.

What does the future hold?

The future is uncertain for both households and businesses. The rise in inflation is likely to continue in the coming months, which will put further pressure on household budgets and business margins.

The Bank of England is expected to continue raising interest rates in an effort to bring inflation down. However, this will also make it more expensive for households and businesses to borrow money.

Conclusion

The rise in inflation is having a significant impact on both households and businesses. The future is uncertain, and it is important for households and businesses to plan for the possibility of continued high inflation.

What can households do?

There are a number of things that households can do to cope with the rising cost of living:

Create a budget and track your spending to see where your money is going.
Cut back on unnecessary expenses.
Look for ways to save money on your household bills, such as switching energy suppliers or shopping around for cheaper insurance.
Consider increasing your income by getting a part-time job or starting a side hustle.
What can businesses do?

There are a number of things that businesses can do to cope with the rising cost of living:

Review your costs and look for ways to reduce them.
Increase your prices to cover your costs and maintain your margins.
Offer discounts or promotions to attract customers.
Focus on selling your most profitable products and services.
It is important for both households and businesses to plan for the possibility of continued high inflation. By taking the steps outlined above, households and businesses can reduce the impact of inflation on their finances.