How does UK inflation compare to other European countries?

·Freelance news writer, Yahoo UK
·3-min read
UK inflation surpassed 10% this week. (PA)
UK inflation surpassed 10% this week. (PA)

Spiralling prices are continuing to hit under-pressure households in the cost of living crisis, with UK inflation hitting another 40-year high this week.

Consumer Prices Index inflation (CPI) reached 10.1% in July, the Office for National Statistics (ONS) revealed on Wednesday.

It was the biggest jump in the cost of living since February 1982, when CPI reached 10.4%, and also a massive rise from 9.4% in June.

Inflation has largely been caused by soaring energy and food prices, with estimates it could surpass 13% by October, when Ofgem’s energy price cap will rise again and likely push the average annual bill past £3,000.

UK inflation between January 2011 and July this year. (Yahoo News UK)
UK inflation between January 2011 and July this year. (Yahoo News UK)

These issues are not just hurting the UK, however. Soaring prices are hitting the rest of Europe, too. Here, Yahoo News UK looks at how the UK’s inflation rate compares to other European countries.

How does UK inflation compare to the EU?

According to the latest Eurostat figures, released on Thursday, inflation in the EU was slightly lower than in the UK in July, at 9.8%.

Nonetheless, this is still a massive increase from 2.5% in July last year.

Just as in the UK, Eurostat said EU inflation is mainly being driven by energy and food price rises.

Which EU countries have the highest inflation?

The UK’s 10.1% inflation rate, which is causing so much concern for households across the country, is actually significantly lower than in a number of European countries, as demonstrated by the chart below.

Inflation rates across the EU. (Yahoo News UK)
Inflation rates across the EU. (Yahoo News UK)

A cluster of northern European countries are the worst affected. Estonia leads the way with an inflation rate of 23.2%. It has been badly hit by a combination of surging electricity prices and after-effects of the pandemic.

It is followed by neighbour Latvia (21.3%) and Lithuania (20.9%).

At 6.8%, France and Malta have the lowest inflation rates in the EU - alarming figures in normal times but relatively low in the context of spiralling global prices.

Read more: Quit smoking and stop living off takeaways to cope with cost of living crisis, Tory MP says

The Local has previously reported France's economy has been aided by the country's use of nuclear power, from which it derives 70% of its electricity. This has meant it has been less impacted by the record rise in global gas prices - with gas being a major source of electricity generation for many countries.

In the UK, for example, gas made up 44% of electricity generation last month - more than any other source.

With six weeks to go before energy bills rapidly increase once again with the next lifting of Ofgem's price cap, the UK’s policy response is effectively on hold with Boris Johnson running a lame duck government having been forced to resign last month. It’s still more than two weeks before the winner of the Conservative Party leadership contest - and therefore next prime minister - is announced on 5 September.

Watch: Labour calls on PM to 'get back to work' to deal with bills

With prices continuing to rise, it is widely acknowledged further government support will be required and on Friday, the Labour Party demanded that Parliament returns early from the summer recess in order to tackle soaring energy bills.

Responding to the call, Downing Street said: “While fiscal decisions for the coming months will be for the next prime minister, we are continuing to support people directly now with financial support as part of our existing £37bn package which will continue to arrive in the weeks and months ahead to help people with the rising cost of living."