The rate of inflation has surged to a fresh 40-year high

By Suzanne Evans, Director, Political Insight

The rate of inflation has surged to a fresh 40-year high. The Consumer Prices Index (CPI) measure of inflation rose to 10.1% in the 12 months to July, up from 9.4% in June, the Office for National Statistics said this morning. Rising food and drink prices made the biggest contribution to the increase. The government responded by saying there will be no further interventions before the outcome of the forthcoming Conservative Party Leadership election set for 5^th September, when either Rishi Sunak or Liz Truss will become the new prime minister. In statement, Chancellor Nadhim Zahawisaid: "Getting inflation under control is my top priority, and we are taking action through strong, independent monetary policy, responsible tax and spending decisions, and reforms to boost productivity and growth."
 
Food prices have increased by 11.6% over the past month, according to market research firm Kantar. The increase - the biggest Kantar has recorded since it started tracking supermarket prices 14 years ago - will add £533 to the average annual grocery bill. Kantar also reports a sharp uptick in sales of supermarket own-label value products; they increased by almost a fifth - 19.7% - as people sought to drive down the cost of their weekly shop. Fraser McKevitt, head of retail and consumer insight at Kantar, said: "It's not surprising that we're seeing shoppers make lifestyle changes to deal with the extra demands on their household budgets. Over the past month we've really seen retailers expand and advertise their own value ranges across the store to reflect demand." Sky News says consumers are also shopping around more and switching supermarkets in response to the spending squeeze. Discount chain Lidl remained Britain's fastest growing grocer over the 12 weeks with sales up 17.9%. Rival German discounter Aldi also performed strongly, reporting 14.4% growth. Meanwhile, Tesco was the strongest performer among the UK's biggest grocery chains, reporting 1% growth. Asda saw sales increase by 0.2% and Sainsbury's recorded a 0.1% dip. The worst performer of the big four was Morrisons, which saw sales decline by 4.9%. The recent heatwaves also resulted in a surge in sales of soft drinks, ice cream and summer clothes, according to Kantar.
 
Frozen-food chain Iceland is to offer customers interest-free loans to help with their food shop amid soaring inflation. The supermarket trialled a similar scheme in Huddersfield and Rhyl, in Denbighshire, before rolling it out across Wales, where more than 500 customers used it. Speaking to BBC Radio 5 Live, Iceland Managing director Richard Walker said: "The Social Impact Reporting [from the trial] showed that over 90% of people reduced their need to go to food banks, improved people's credit scores, their mental health, they ate better, and 70% of them didn't fall behind on essentials like rent and council tax." The loans – which are actually provided by charity-owned lender Fair For You - can be applied for online and “you get a response as quickly as in an hour” Walker said. He added Fair for You will only loan to people who can afford the repayments.
 
Thames Water has announced a hosepipe ban for 15 million customers living in the Thames Valley and London from 24^th August.
 
British Airways has reached a pay settlement with staff and is to offer an average 13% rise to help offset the cost-of-living crisis and pay cuts made during the pandemic. The agreement, reached by Unite negotiations with the airline, means workers will receive a lump sum equal to 5% of their wages in August, followed by a consolidated 5% increase in September and another 3% in December. Unite general secretary, Sharon Graham, said: “Once again, Unite's focus on improving jobs, pay and conditions has delivered for our members."
 
Britain is second only to Ireland in having the highest number of credit card fraud cases in Europe, research from payment processing comparison website Merchant Machine shows. On average, victims lost around £8,775 each. According to the Official for National Statistics (ONS). 4.5 million fraud offences took place in the year ending March 2022, a 25% increase from March 2020.
 
Britain expects to take delivery of a shipment of Australian liquefied natural gas (LNG) next week, according to commodities analysts Kpler, but it is probably not destined for the UK market. Energy analyst David Cox told Sky News that he imagined “most of it will be exported to Europe where they're racing to increase their supplies." The Australian shipment was a sign of how "desperate" European countries were to secure alternative sources of gas before winter, he added. Cox said the unusual decision by Australia to sell to Europe could be partly due to reduced demand from China, where repeated Covid lockdowns had reduced energy demand. Australia has not shipped LNG to Europe in at least six years, according to Bloomberg. The UK stopped importing gas from Russia in April.
 
Hydrogen fuel cells manufacturer Loop Energy is to open its first UK factory in Grays, Essex. The firm, which is listed on the Toronto Stock Exchange, and has raised $100 million CAD so far, is targeting the commercial vehicle sector, including buses and heavy goods vehicles which made up 18% of all road emissions in 2019, according to UK government data. Loop Energy President & CEO, Ben Nyland said: “We are excited to open a new facility in the UK, where both the private and public sector is quickly growing around decarbonizing commercial vehicles. We were pleased to see the UK government’s recent commitment to the hydrogen sector, with the Business Secretary’s pledge to unlock £9bn investment needed to make hydrogen a cornerstone of the UK’s greener future”. The Business Minister Lord Callanan said: “As the world shifts to cleaner transport, it is critical we embed a UK supply chain that can capture the economic opportunities of hydrogen technology. Loop Energy’s expansion in Essex is fantastic news for the region, bringing green jobs and growth, while adding to the UK’s reputation as a leader in hydrogen and fuel cell research.”
 
Reebok, Juicy Couture and Forever 21 owner Authentic Brands Group(ABG) has agreed to buy Ted Baker for some £211 million. The deal ends months of speculation over the fate of the British fashion house, after pandemic-related losses forced it to put itself up for sale in April. ABG will pay 110p for each Ted Baker share, a premium of 18.2% to Monday's closing price.
 
A new UK-based lender has been given a licence by regulators to offer mortgages with fixed rates of up to 50 years. Yahoo Finance UK reports that Perenna is initially planning to provide home loans that lock in rates for 30 years before introducing options that last for even longer. Banks typically provide mortgages with fixed rates of only up to 10 years. Perenna’s products will be available to first-time buyers - who can access 95% loan-to-value products – as well as those looking to move, remortgage or take out a mortgage in later life.
 
The Competition and Markets Authority (CMA) has closed its leasehold case against Barratt Developments, citing a lack of evidence. The CMA was investigating whether the FTSE 100 housebuilder had mis-sold leases for houses, as part of a wider probe into the residential leasehold sector, but concluded, after "careful scrutiny" of the evidence gathered, that it was insufficient to support a "clear legal case" to secure collective redress for Barratt leaseholders under its consumer law powers. The CMA added: “Barratt's sales practices have changed, and they no longer sell leasehold houses."
 
The Telegraph reports that while other top chefs such as Gordon Ramsey and Heston Blumenthal have reported recent losses at their restaurants, the Nusr-Et Steakhouse in Knightsbridge, London, run by flamboyant Turkish butcher Salt Bae, made sales of £7m in its first three months of operations. Bae, who has opened 22 restaurants worldwide since finding fame on social media, is known for sprinkling salt so that it bounces off his elbow onto food and is almost always pictured wearing round black sunglasses. He opened the UK branch on September 23 last year and initially offered a tomahawk steak covered in flakes of 24-carat gold for £850. The priciest dish currently is a £680 Wagyu steak. A rack of lamb sells for £200 and a burger for £40. The Telegraph’s food critic, William Sitwell, has called the prices “inexcusable”. The newspaper says some reviewers have refused to dine there.
 
A blog post from US-based blockchain analysis firm Chainalysis claims that losses arising from cryptocurrency hacks jumped nearly 60% in the first seven months of the year to $1.9 billion. in the same period last year, stolen funds from hacking amounted to $1.2 billion. The blog says most of the funds stolen can be attributed to "bad actors" affiliated with North Korea, especially elite hacking units like Lazarus Group. Chainalysis estimates that North Korea-affiliated groups have stolen approximately $1 billion of cryptocurrency. Crypto scams, however, have seen a 65% decline, Chainalysis says, falliing to £1.6bn in the year to July, down from around $4.46 billion in the same period last year. "Scams are down primarily because of the crypto downturn, but also because of the many law enforcement wins taken against scammers and the product solutions that exchanges can use to fight scamming," said Kim Grauer, Chainalysis' director of research, in an email to Reuters.
 
Apple has told its employees they must get back in the office for at least three days every week. In a memo sent to employees by CEO Tim Cook on Monday, the company stressed that "in-person collaboration" is "essential to our culture".
 
Yesterday, Tesla founder and CEO Elon Musk said on Twitter: "I'm buying Manchester United ur welcome." But, when asked if he was serious, replied: "No, this is a long-running joke on Twitter. I'm not buying any sports teams."

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