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Inflation in the UK has reached a 40-year high of 9.0%, putting further pressure on households.

  • UK inflation is likely to be highest in the G7 in April
  • Home energy bill boosts inflation
  • Poverty eradication activists demand government action
  • Inflation could rise further

London, May 18 (Reuters)-Britain’s inflation surged to its highest annual rate since 1982 last month, and Finance Minister Lishi Snack, despite the risk of a recession, households and England It pressured banks to provide further support to keep raising interest rates.

According to the National Bureau of Statistics, consumer price inflation reached 9% in April, above the peak of the recession in the early 1990s, which many British people remember with high interest rates and widespread mortgage defaults.

The UK has the highest inflation rate of any European power and is almost certainly the Group of Seven, with Canada and Japan not yet reporting April data. Both are unlikely to be comparable to UK price increases, which are likely to last.

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Last month, the International Monetary Fund predicted that the UK in 2023 faced slower economic growth and more sustainable inflation than any other major economy.

Inflation rate compared

Soaring energy bills were the biggest inflation factor, reflecting the rise in regulated energy tariffs in April. The knock-on effect of Russia’s invasion of Ukraine means that these bills could bounce again in October.

“We cannot fully protect people from these global challenges, but we are ready to provide the most important support possible and take further action,” Sunak said.

A Reuters economist poll pointed out that Sterling had fallen, rising from 7.0% in March to 9.1%.

Households have faced the greatest cost of living pressures since the record began in the 1950s, says UK budget forecasters, and consumer confidence is sunk to record lows.

Poverty eradication activists have urged snacks to act now, starting with an immediate increase in benefits.

“Omissions (of snacks) will exacerbate the desperate situation for many already,” said Rebecca McDonald, senior economist at the Joseph Rowntree Foundation, which is campaigning for low-income households. rice field.

According to a survey on Tuesday, two in three people turned off heating when they should have been on normally, and almost half reduced driving or changed supermarkets, a quarter. Strong answered that he skipped the meal.read more

Food prices have risen nearly 7% in the 12 months to April, according to ONS.

People shop at a supermarket in London, England on December 24, 2021.Reuters / Kevin Combs

On Monday, Bank of England Governor Andrew Bailey said rising food prices were a major concern as he apologized for being “apocalyptic for a moment.”

The government has so far pointed out £ 22 billion ($ 27.4 billion) household support packages, many of which have been offset by recent tax increases on workers.

Snacks are planning to increase the benefits of tax cuts and home heating by hundreds of pounds, according to The Times.

The rise in prices charged by restaurants and cafes was added to last month’s inflation surge as value-added tax rates returned to pre-pandemic levels in April.

UK inflation rises highest since 1982

Bad to come

This month’s BoE predicts that the inflation rate will exceed 10% later this year, and investors have raised bank rates in 2009, in addition to the four interest rate hikes that the central bank has implemented since December. We expect to raise it to 1%, the highest since then.

Bank of America criticized this week that the BoE’s response was unclear and could remain vulnerable to political attacks and economic downturns.

“The Bank of England’s reaction function is less transparent and monetary policy is at risk of politicization,” he said in the report.

Former Conservative Defense Minister Liam Fox accused the BoE of failing to detect a surge in inflation last week, and the Sunday Telegraph reported that the unnamed current minister was also critical.

“The 25-year record of central bank independence speaks for itself,” Snack told Congress on Tuesday, despite current challenges.

According to ONS, retail price inflation is no longer accurate, but is widely used in commercial contracts and interest payments on inflation-linked government bonds, which also jumped to 11.1%, the highest since 1982.

There are signs of further inflationary pressure in the future. Manufacturers suffered record highs in raw material prices, up 18.6%, comparable to March’s highs.

The factory increased prices by 14.0% in the 12 months to April. This is the largest rise since July 2008.

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Edited by John Stone Street and Allison Williams

Our Criteria: Thomson Reuters Trust Principles.

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