Double digit rate expected
UK inflation at 40-year high
06/22/2022, 10:21 am
Consumers in the UK are groaning under high inflation. Prices rose again in May. The central bank is resisting the development, which could become a political problem for Prime Minister Johnson. Because one in four Britons is starting to skip meals.
Consumer prices in the UK rose at their highest rate since 1982 in May. Goods and services cost an average of 9.1 percent more than a year earlier, according to the Office for National Statistics in London. Economists had expected this after the inflation rate had already reached 9.0 percent in April. Rising prices for food and non-alcoholic beverages in particular drove inflation up this time.
“We are using all tools at our disposal to reduce inflation and combat rising prices,” Finance Minister Rishi Sunak said. “We can build a stronger economy through independent monetary policies, responsible fiscal policies that do not increase inflationary pressures, and increasing our long-term productivity and growth.”
Last week, the Bank of England raised interest rates for the fifth time in seven months in order to alleviate price pressure. It is now at 1.25 percent. As a result, the rate of inflation should return to the target of 2 percent set by the monetary authorities in a sustainable manner in the medium term. However, the central bank expects prices to continue to rise for the time being: for October, for example, they expect an inflation rate of 11 percent.
According to a survey by the Ipsos institute, the rapidly rising cost of living is hitting the island’s citizens hard: according to this, two out of three Britons are turning off the heating to save costs. More than a quarter of respondents even said they skip meals because of their tight budgets. This situation is increasing popular dissatisfaction with the government of Conservative Prime Minister Boris Johnson. At the same time, calls are getting louder for increasing social assistance in order to relieve poorer sections of the population in view of the rapidly rising cost of living.