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Inflation in the UK reaches a high of 9.0% for the first time in 40 years due to household suffering

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London — UK inflation surged to its highest annual rate since 1982, putting pressure on Finance Minister Rishi Sunak to step up support for households facing an exacerbating cost of living crisis.

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.

A Reuters economist poll showed a measurement of 9.1%.

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The UK currently has the highest inflation rate of the five largest economies in Europe and is almost certainly a group of seven countries, with Canada and Japan not yet reporting April figures. Neither can match the rise in UK prices.

“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.

Sterling fell after the data, down 0.6% against the dollar at 0816 GMT.

Soaring energy prices were the biggest factor in inflation, reflecting last month’s regulated rises in energy prices. The knock-on effect of Russia’s invasion of Ukraine means that these bills are likely to rise again in October.

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UK budget forecasts show that households have faced the greatest pressure on living expenses since the record began in the 1950s, and consumer confidence has fallen to its lowest level in history.

Poverty eradication activists have called on snacks to act now, starting with an immediate increase in the value of welfare benefits to match inflation.

“As the prices of necessities such as food and energy continue to rise, the inaction of the Prime Minister (Finance Minister) will exacerbate the already desperate situation for many,” said Joseph Rowntree Foundation’s senior economist. Rebecca McDonald said income-bearing households.

According to a survey released on Tuesday, two in three people in the UK turned off heating when they would normally have turned it on. Almost half have reduced their driving or changed supermarkets, and just over a quarter said they skipped meals.

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

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

The government says it currently has a £ 22 billion ($ 27.4 billion) household support package, much of which has been offset by the impact of recent tax increases on workers.

As VAT rates returned to pre-pandemic levels in April, rising prices charged by restaurants and cafes also contributed to the surge in inflation last month.

Bad to come

This month’s BoE predicts that the inflation rate will exceed 10% later this year, and investors have raised bank rates since December to 1%, the highest since 2009. Expected to be added to the four interest rate hikes.

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Paul Dales, Chief Economist of the United Kingdom, Capital Economics Consultant for Data on Wednesday, said:

According to ONS, retail price inflation, which is currently inaccurate but is a widely used old indicator for interest payments on commercial contracts and price-linked government bonds, surged to 11.1% last month, also the highest since 1982. is.

Further signs of inflationary pressure were seen as manufacturers suffered record-high rises in prices paid for raw materials. This was an annual increase of 18.6%, comparable to the March highs.

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

(Edited by John Stone Street)

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Inflation in the UK reaches a high of 9.0% for the first time in 40 years due to household suffering

Source link Inflation in the UK reaches a high of 9.0% for the first time in 40 years due to household suffering

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