* Data this week has underscored recession risks in UK
* Inflation tops 10%, wages lag behind
* Consumer confidence at record low
* Bank of England expected to raise rates further
* Pressure on new PM to come up with more support
By William Schomberg
LONDON, Aug 19 (Reuters) - Britain's slide towards a recession has gathered momentum after data this week showed inflation jumping above 10%, wages lagging far behind price growth and consumer confidence sinking to a record low.
The deteriorating picture for the world's fifth-biggest economy comes after the Bank of England warned this month of a 15-month contraction from the end of this year, worse than the outlook for other big European economies and the United States.
Higher-than-expected public borrowing figures on Friday underlined the hard decisions facing the next prime minister about how to expand help for the poorest households, which has so far fallen short of support given by most other European governments.
The stakes were laid bare by a warning from public healthcare providers that Britain faced a "humanitarian crisis" as soaring energy prices put many poorer Britons at risk of physical and mental illness.
"Many people could face the awful choice between skipping meals to heat their homes and having to live in cold, damp and very unpleasant conditions," Matthew Taylor, chief executive of the NHS Confederation, said.
The scale of the hit to households from their energy bills will become clearer next Friday when regulators announce the latest leap in the cap on electricity and gas tariffs, which have surged since Russia's invasion of Ukraine.
Already almost double their levels of a year ago, the tariffs could double again by early next year.
Next week's announcement comes against the backdrop of a record fall in wages, excluding bonuses and adjusted for the jump in inflation which has hit 10.1%, its highest level since 1982.
Consumers provided some relief from the flow of bad economic news as data on Friday showed retail sales volumes unexpectedly edged up in July.
However, the increase was largely driven by online discounts, and real-time figures on spending using debit and credit cards have shown a big drop in spending in early August.
Retailers say they are already deep in crisis mode.
"For many businesses, 2022 is proving to be every bit as challenging as the pandemic," Helen Dickinson, chief executive of the British Retail Consortium, said.
BANK OF ENGLAND IN A BIND
Soaring inflation and the Bank of England's forecast of a long - albeit relatively shallow recession - have heightened the dilemma facing the central bank.
It has already raised interest rates six times since December, slowing momentum in the economy, but signs of broadening inflation pressures have prompted economists to raise their forecasts for further hikes in borrowing costs.
Analysts at Investec said on Friday they now expect the BoE to raise rates by half a percentage point for a second time in a row in September followed by a final quarter-point increase in November, before it cuts rates in 2023 to ease the recession.
Investors are also ramping up their bets on higher borrowing costs in Britain.
Two-year British government bond yields on Friday hit their highest since November 2008, midway through the global financial crisis, and the spread over equivalent German bonds was the widest since March this year.
With the BoE determined to show its critics that it will bring inflation under control by raising rates, the focus is turning to whoever wins the race to replace Boris Johnson as prime minister next month.
The front-runner, Foreign Secretary Liz Truss, has said she will cut taxes. The other contender, former finance minister Rishi Sunak, says that risks fuelling inflation. He prefers more direct and more targeted support.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, estimates that if Truss wins, the budget deficit could hit 170 billion pounds ($201.18 billion) in the current financial year.
That would be up from 144 billion pounds last year and triple its size before the pandemic, but smaller than borrowing of 309 billion pounds in the 2020/21 year during the depths of the coronavirus crisis.
Significant extra borrowing looks likely whoever enters Downing Street.
Andrew Goodwin, chief UK economist at Oxford Economics, said that provided support measures are temporary they would not hurt Britain's long-term fiscal outlook.
"There's plenty of room for the next prime minister to offer that support and ultimately if they don't, that's a political choice," Goodwin said. "It's not something that's forced on them by the public finances." ($1 = 0.8450 pounds) (Writing by William Schomberg; Editing by Susan Fenton)