British consumer price inflation rose to 10.1% in July, up from 9.4% in June, in the highest figure since February 1982, according to the Office of National Statistics.
The increase was higher than had been predicted in a poll of economists by news agency Reuters.
Chancellor of the Exchequer Nadhim Zahawi said: “I understand that times are tough, and people are worried about increases in prices that countries around the world are facing.
“Although there are no easy solutions, we are helping where we can through a £37 billion support package, with further payments for those on the lowest incomes, pensioners and the disabled, and £400 off energy bills for everyone in the coming months.”
On Tuesday, ONS data showed that underlying real wages had fallen by 3%, the sharpest drop since records began in 2001.
Earlier this week experts predicted that the Bank of England would raise interest rates by another 0.5% next month as it battles to control soaring inflation, experts have warned.
In a poll of economists by news agency Reuters, 30 out of 51 forecast that the Bank would raise interest rates by 50 basis points to 2.25% in September.
Another 21 economists suggested that the bank would raise interest rates by 0.25% in September – after a 0.5% raise in August.
In recent weeks, British companies pared back profits and earnings forecasts as consumers tightened their belts, with delivery unicorn Deliveroo (GB:ROO) cutting its revenue guidance.
As consumers shun big-ticket purchases, furniture retailer Made.com (GB:MADE) also slashed its earnings and sales forecasts for the coming months.
The National Institute of Economic and Social Research warned last month that the Bank of England would need to raise interest rates to 3% to bring down inflation.
