RISING food and utilities costs drove higher than expected inflation in July, with TUC general secretary Paul Nowak warning today that “many are struggling to keep their heads above water.”

Overall inflation measured by the consumer prices index (CPI) rose from 3.6 to 3.8 per cent over the month, the Office for National Statistics (ONS) said.

Food and non-alcoholic beverage inflation was, however, much higher at 4.9 per cent, while water rose by a painful 26.4 per cent.

Energy inflation was also more than double the overall rate, with electricity and gas prices rising respectively by 8 per cent and 13 per cent on the year.

The retail prices index rate of inflation — seen by unions as more representative of real living costs — was even higher than CPI, rising from 4.4 to 4.8 per cent as airlines also ramped-up ticket prices in July.

Mr Nowak said: “Global uncertainty and rising utility prices mean workers are still feeling the pain of higher prices. Many are struggling to keep their heads above water.

“While interest rate cuts this year have been welcome, workers still do not have enough money in their pockets and consumer spending is near stagnant.

“Workers’ living standards must remain top priority. The Bank of England needs to go further, with more rate cuts to get the economy moving.”

Unite general secretary Sharon Graham added: “Once again, the soaring cost of basic essentials like food and water is pushing families to the brink. Workers and their families are struggling to pay excessive bills. 

“Pressure needs to be taken off family budgets by giving workers a pay rise. The time for action is now.”

Money editor at comparison site Which? Jenny Ross said: “These latest inflation figures are a stark reminder that the cost-of-living crisis continues to blight households, with the price of many essential goods and services having outpaced wage growth in recent years.

“Every small saving can add up, so it’s more important than ever to shop around whenever you can. Whether it’s your supermarket, broadband provider, energy company or even your insurance provider, loyalty rarely pays off, so don’t be afraid to vote with your feet — better deals can be found.”