Home WORLD EUROPA UK inflation picks up again amid cost of living crisis

UK inflation picks up again amid cost of living crisis

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The acceleration in prices in June was fueled by fuels and food, specifies the National Statistics Office (ONS) in its monthly report published on Wednesday, while housing and transport prices are also among the inflationary factors .

In May, inflation reached 9.1% over one year. The Bank of England (BoE) estimates that it could rise to more than 11% by the end of the year, boosted by the Russian invasion of Ukraine, the surge in gas prices it has caused and a labor market wrought up.

Especially since the current weakness of the pound threatens to further exacerbate inflation in the coming monthswarns Karl Thompson, an economist at the CEBR think tank.

Bank of England Governor Andrew Bailey warned on Tuesday that the monetary institute, in an attempt to stem this surge in prices, could accelerate the pace of its rate hikes by raising them by 0.50% in August. It would be the biggest turnaround in 27 years.

Capital Economics’ Paul Dale says the Bank of England is likely to raise interest rates over the months by 1.25% currently 3% even if the economy is in recession.

Election stake

The UK economy is indeed seeing the clouds gathering. the IMF predicted in April that the UK would see the worst growth of the G7 countries next year. The Bank of England predicts a contraction.

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As for inflation, it is currently the worst in the G7 countries, according to the latest available statistics, and should remain so in the months to come, according to several forecasting organizations.

For comparison, price inflation in the euro zone stood at 8.6% year on year last month. It reached 9.1% over one year in June in the United States and 2.1% in Japan in May.

Countries around the world are dealing with rising prices and I know how difficult it is for people here in the UK so we are working alongside the Bank of England to bring it downreacted the Minister of Economy and Finance, Nadhim Zahawi, highlighting government aid for low-income households.

A trader sells oranges at a street market in London.

Inflation in the UK hits its highest level in 40 years.

Photo: Getty Images/Carl Court

The cost of living crisis is a central theme in the campaign of the Tory candidates to succeed Boris Johnson in Downing Street and is likely to be high on the next prime minister’s agenda as a tough winter looms.

Critics are piling up about the central bank’s strategy, coming in particular from conservative candidates, to the point that Andrew Bailey thought it a good Tuesday to recall the importance of central bank independence.

The value of a diet is judged in bad times, not when things are going well. »

A quote from Andrew Bailey, Governor of the Bank of England

In the meantime, the escalation of prices in the context of a shortage of workers in the United Kingdom is fueling wage demands and strike movements.

On Tuesday, the latest official employment statistics showed a fall at a record pace in real wages, that is to say excluding inflation.

Nearly half of young people aged 16 to 25 did not always have enough to eat last year, notes a study commissioned by the association for helping young people SDF Centrepoint.

And the wealth gap between the wealthiest 10% of households in the UK and those who are in the middle has reached a new record, underlines the Resolution foundation, which fights against poverty and inequality.

This gap means not only that owning a home becomes an unattainable dream for many, but also that it becomes more and more difficult for more and more Britons to withstand unexpected economic shocks or inflationary surges, underlines the foundation in a study.

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