UK INFLATION ACCELERATES TO 41-YEAR HIGH OF 11.1% AS FOOD PRICES SOAR

Wed 16 November 2022:

According to official figures, British inflation has surged to the highest level in 41 years, driven by surging energy, food, and transportation prices in a deteriorating cost-of-living crisis.

According to the Office for National Statistics (ONS), the Consumer Prices Index hit 11.1 percent in October, the highest level since 1981.

In contrast, the rate in September was 10.1%, the highest in 40 years and on par with the rate in July.

Despite the UK government’s restriction on energy prices, domestic fuel costs continued to soar as the market dealt with new impact from a major producer Russia’s invasion of Ukraine.

The October result exceeded the Bank of England’s anticipated peak and above market forecasts by 10.7 percent.

“Rising gas and electricity prices drove headline inflation to its highest level for over 40 years, despite the Energy Price Guarantee,” said ONS chief economist Grant Fitzner.

During the last year, gas prices have leapt by 130 percent and electricity prices by 66 percent, according to the ONS.

UK rents are continuing to climb, at the fastest pace in at least six years.

Private rental prices paid by tenants in the UK rose by 3.8% in the 12 months to October, the Office for National Statistics reports, up from 3.7% in September.

That’s the largest annual percentage change since the ONS started collecting the data in January 2016, adding to the cost of living squeeze on tenants.

The East Midlands saw the highest annual percentage change in private rental prices (4.8%), while London saw the lowest (3.0%).

Private rental prices paid by tenants in the UK rose by 3.8% in the 12 months to Oct 2022.

This was up from 3.7% in Sept 2022.

➡️ https://t.co/cbpf0P7Kr6 pic.twitter.com/5olNKc6qv5

— Office for National Statistics (ONS) (@ONS) November 16, 2022

Food prices and transport costs also propelled inflation higher.

Runaway inflation comes despite Britain’s energy support, which sought to limit annual energy bills at an average of 2,500 British pounds (nearly $2,970) per year.

The conflict in Ukraine has also caused global inflation to skyrocket to its highest level in decades, causing economic unrest and driving major central banks to raise interest rates.

To tackle sky-high inflation, the Bank of England (BoE) announced its largest interest rate increase since 1989 this month, but it also issued a warning that the UK economy would face a record-long recession until mid-2024.

Prime minister Rishi Sunak has promised his government will get to grips with inflation.

Speaking at the G20 summit in Bali, Indonesia, Sunak calling inflation ‘the enemy’, and the top worry facing households as they are hit by rising bills and higher mortgage costs.

He said: “My absolute number one priority is making sure that we deal with the economic situation that we face at home. With more news of inflation today it’s the number one thing that’s on people’s minds, it’s the thing that’s causing most anxiety. Opening up bills, emails come in with rising prices, and that’s why it’s right that we grip it”

“People’s number one anxiety at the moment is the rising cost of living, it’s inflation… The chancellor rightly described it as insidious, it makes people poorer, that’s what inflation does. And it’s the enemy that we need to face down.

I want to make sure that we do that and we do it as quickly as possible. I want to limit the increase in mortgage rates because that’s also causing anxiety for millions of homeowners across the UK.

And given that we’re facing these global economic shocks, we are going to have to take some difficult decisions at home to protect ourselves against those and to start getting a grip on inflation.”

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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