Inflation hit 10.1% in the 12 months to July, up from 9.4% in June, the Office for National Statistics (ONS) said.
Soaring living costs are eating into household budgets, with prices rising faster than wages.
The Bank of England has said inflation could peak at more than 13% this year.
Energy, petrol and diesel costs are also contributing to inflation. But food and non-alcoholic drinks were the largest contributor to rising prices in July, according to the ONS.
The price of bread, cereals, milk, cheese and eggs rose the fastest, while the cost of vegetables, meat and chocolate were also higher.
The Bank of England warned earlier this month that inflation will climb to just over 13 percent this year, the highest level since 1980.
It also projected that the country would enter a recession that would last until late 2023.
The central bank raised its key rate by 0.50 percentage points to 1.75 percent at its last policy meeting, the biggest hike since 1995.
The BoE move mirrors aggressive monetary policy from the US Federal Reserve and the European Central Bank last month, as the world races to cool red-hot inflation that has been fuelled by Russia’s invasion of Ukraine.
The UK’s statistics office said the “largest movements” in the CPI in July came from food.
Bread and cereals were the largest contributors to the rise in food prices, followed by milk, cheese and eggs.
Despite warning this month that a recession was likely, the BoE raised its key rate by 0.5% to 1.75% – its first half-point rise since 1995. It saw inflation peaking at 13.3% in October when regulated household energy prices are next due to rise.
Citi economist Benjamin Nabarro said that, after the latest figures, he now expected inflation to peak above 15% early next year.
“With the Bank focused on signs of more persistent inflationary pressures, we think a hawkish reaction is now all but inevitable,” he added.
The inflation rate is moving closer to the 13.3% peak the Bank of England forecast for October, while warning that the country faces a deep and prolonged recession.
In corporate news, Uniper (ETR:UN01) is likely to be in the spotlight after the German energy company, which secured a 15 billion euro bailout last month, unveiled a net loss of more than 12 billion euros ($12.2 billion) for the first half, partly blaming lower Russian gas supplies that forced it to buy at much higher prices elsewhere.
Oil prices rose Wednesday, bouncing from six-month lows after a bigger-than-expected drop in U.S. crude inventories reduced concerns over waning demand at the world’s largest consumer.
Global inflation
Wednesday’s figures from the Office for National Statistics showed that prices rose 0.6 percent in July from June on a non-seasonally adjusted basis. The annual rate of retail price inflation hit 12.3 percent, its highest since March 1981.
Britain is not alone in facing soaring price growth but there are signs it will continue to struggle with rising inflation for longer than other countries.
Many economists believe US inflation has peaked after it dropped to 8.5 percent in July from a 40-year high of 9.1 percent in June.
We have always emphasized the importance of having a good website for your company because it can act as your best tool for marketing and sales. A poorly designed website can repulse people from your business and can cause you to lose customers before you even have them. Get in touch with HyperEffects to work on creating, enhancing, and making the website of your company more user-friendly.