UK inflation hits 40-year high

The UK has seen record inflation in July, with the highest rate of increase in 40 years. Data from the Office for National Statistics (ONS) Consumer Price Index (CPI) rose to 10.1 percent from 9.4 percent for the month of June, higher than the forecasted 9.8 percent.

Prices for clothing and footwear items fell by 1.5 percent between June and July, compared with a larger fall of 2 percent in the previous year. Prices have risen by 6.6 percent in the year compared with an increase of 6.1 percent in the year to June. The upward movements came from garments, in particular women's clothing, infant's clothing and women's footwear. There was a partially offsetting downward contribution from menswear, where prices overall fell, between June and July, by more than a year ago.

Fashion considered non-essential

Consumers are grappling with higher costs of living and thus reducing spending on fashion, which are deemed as non-essential when compared to housing, food and transport.

Retailers are also dealing with higher costs, and ultimately consumers will be paying more for items that have become more expensive to produce. The British Retail Consortium (BRC) said higher energy prices, a tight labour market, and the costs of shipping and transport, are impacting all retailers.

Both emerging markets and global economies are seeing a surge in inflation, however the UK has seen the greatest inflation rises of all G7 countries and most European nations, reported the Financial Times. Elsewhere in Europe, Estonia has seen some of the highest inflation rates, with 15.4 percent expected for the year 2022.