The U.K. Historical High Inflation Trend Has Not Stopped Yet

With the U.K. inflation reaching its highest increasing rate in 40 years in June, the pressure on the Bank of England to raise the interest rate has increased. According to the data from the U.K.’s Office for National Statistics, the annual inflation rate has risen 9.4% in June compared with last year, this is the fastest increase since February 1982. The consumer price increase was 9.1% in May. It has further accelerated the increase in June due to the 9.3% increase in fuel price. It’s expected that the increase in consumer prices faster than salary will increase the burden on families. With the inflation rate reaching 11% with a new crisis of energy in October, the situation can get even worse.

 Deflation cycle of the currency policy Bank of England officials called on attention to concerns that the cost of rising wages and raw materials could push companies to increase the price of their products again. In his annual speech, Bank of England Governor Andrew Bailey proposed to rise 0.5% of interest rate to bring the inflation rate back to the 2% target in August. If that happens, this will be the first half percentage point rise since the bank gained independence in 1997.

 Although the authority has increased the interest rate 5 times since last December to 1.25%, it’s estimated that the interest rate will reach to 3% at the end of this year.Every country is having an inflation problem at moment. After a few decades of over-printing money, the effects of the CCP viruses and the Russia-Ukraine War have aggravated the inflation and stagflation of the world economy, including a shortage of food and energy.

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Translator: OXV Translation Team
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