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In our Market insights, Prosperity Investment Management examines the latest developments across the globe's biggest financial markets - providing you with all the latest information you need to know.
Prices are continuing to rise at their fastest rate for more than 40 years, with the UK inflation rate passing double digits for the first time since 1982.
Inflation hit 10.1% in the 12 months to July, up from 9.4% in June, the Office for National Statistics (ONS) said.
The Bank of England has said inflation could peak at more than 13%. The figure was higher than economists expected, with rising food prices making the biggest contribution with energy, petrol and diesel costs also being a contributing factor.
Soaring living costs are eating into household budgets, with prices rising faster than wages.
Transport costs were another big contributing factor, with air fares and international rail tickets particularly increasing.
The rise in global food commodity prices, following Russia's invasion of Ukraine, has been one of the factors pushing up prices at supermarket tills. The war has disrupted supplies from the two countries, which are major exporters of goods such as sunflower oil and wheat.
Some commodities, especially grain and edible oils, have eased substantially, but there is typically a time lag of around six months before that feeds through to prices on the shelves.
While the Bank of England and others had forecast that inflation would exceed 10%, most economists didn't expect it to happen so swiftly - with the latest consensus forecast at around 9.8%.
The causes are familiar: the reopening of the global economy post-pandemic, which meant the supply of goods like fuel couldn't keep up with surging demand, made worse by the war in Ukraine, which further disrupted the supply of goods like gas, wheat and cooking oil.
That's led to a surge in output prices - prices of goods at the factory gate - which rose by 17.1%, faster than they have since 1977.
The inflation rate is expected to rise further in October, when higher energy bills hit.
