Inflation returns to 40-year high at 10.1 per cent with Hampshire businesses 'crippled' by cost of living crisis

The Office for National Statistics (ONS) said Consumer Prices Index inflation reached 10.1 per cent in September, compared with 9.9 per cent in August.

The increase was driven by food prices, which leapt by 14.5 per cent compared with the same month last year, representing the largest annual rise for 40 years.

The overall inflation figure was above the expectations of economists, who had predicted a figure of 10 per cent.

One Waterlooville business owner said that the soaring cost of living was ‘crippling’ small businesses, which have been ‘deserted’ by their customers.

Sara Hall, founder of Waterlooville-based gift website The Silk Purse Guild, said: ‘Soaring energy bills and the constant sense of ‘not knowing’ is seeing artists down brushes and switch off their kilns.

‘Little artisan businesses are closing their doors all over the UK, and it's painful to watch.

‘What used to be a positive and creative space has turned into a dark and frightening one in recent months.

‘Our customers have deserted us, and it's no great surprise to be fair. In times like these, the gifts market is the first to suffer, as people are worried sick about their fuel bill and mortgages, and are not thinking about what will be nestling under the Xmas tree this year.’

The News has extensively covered how the cost of living crisis has impacted people and organisations across the city.

Last month, Portsmouth City Council revealed belt-tightening plans as it aims to plug £7m gap in its budget.

Days later, hundreds of people attended an Enough is Enough rally in Guildhall Square, demanding more action to tackle the cost of living crisis.

ONS director of economic statistics Darren Morgan said the rise in inflation was largely driven by soaring food prices.

He said: ‘After last month’s small fall, headline inflation returned to its high seen earlier in the summer.

‘These rises were partially offset by continuing falls in the costs of petrol, with airline prices falling by more than usual for this time of year and second-hand car prices also rising less steeply than the large increases seen last year.

‘While still at a historically high rate, the costs facing businesses are beginning to rise more slowly, with crude oil prices actually falling in September.’

The latest inflation figure matches the 40-year high inflation hit in July and remains well above the Government’s target of two per cent.