UK Inflation Jumps to Three Decade High Amid Soaring Fuel Costs, Supply Chain Woes

CC0 / Pixabay / British pounds
British pounds - Sputnik International, 1920, 19.01.2022
Britain has proven unable to escape the near-universal jump in producer and consumer prices caused by spiking energy prices and the global supply chain crisis.
The UK’s consumer price index rate jumped to 5.4 percent in the month of December – its highest rate since March 1992, fresh data put out by the Office of National Statistics Wednesday shows.
The figures are above the BoE’s forecast of 5.2 percent and higher than November’s CPI rate showing of a 5.1 percent bump.
Inflation hits the pocketbooks of producers and ordinary Britons alike, with prices on everything from food and clothing to gas, electricity and petrol, used cars, furniture, household goods, and restaurant and hotel bills edging upwards.
Economists expect the BoE to raise interest rates try to get inflation back into line with the Bank’s 2 percent target, but caution against too much of a hike too fast, which might dent economic recovery. The Bank recently raised the base interest rate from 0.1 percent to 0.25 percent.

The BoE expects things to get worse before they get better, forecasting a CPI hike to 6 percent in April – when gas and electricity bills are expected to shoot up by 50 percent after a government energy price cap is lifted. The global supply chain crisis has impacted the availability of goods, and shortages of some categories of workers have also meant higher transportation costs – which businesses typically pass on to consumers.

Earlier this week, the Resolution Foundation, a London-based standard of living think tank, warned that the number of households spending above 10 percent of their budget on energy could treble to 6.3 million once the new energy price cap kicks in on 1 April.
Gas flame - Sputnik International, 1920, 17.01.2022
UK Households Facing ‘Fuel Stress’ May Treble After New Energy Cap in April, Warns Think Tank
“Working families are already feeling the crunch. But the triple whammy of an imminent rise in the energy price cap, real wages falling and Tory tax rises coming down the tracks are going to make this crisis even worse,” Labour shadow Treasury secretary Pat McFadden said on Wednesday, commenting on the new CPI figures. The opposition accuses the government of “looking the other way” and “trapping” Britons in a “high-tax, low-growth cycle.”
Chancellor Rishi Sunak has assured Britons that he understands “the pressures people are facing with the cost of living” and promised to “continue to listen to people’s concerns as we have done throughout the pandemic.”
The UK isn’t the only country facing surging inflation. Last week, the US Department of Labor reported a 7 percent inflation rate in December – America’s highest level since June 1982. The Organization for Economic Cooperation and Development (OECD), a 38-member group of mostly wealthy Western nations, reported their highest inflation rate in a quarter of a century in November. Brazil has seen a 10 percent inflation bump for 2021, while Russia has seen a jump of 8.4 percent over the same period. Only China has somehow managed to beat the inflation burden, reporting a CPI increase of just 1.5 percent year on year in December, down from a 2.3 percent increase a month earlier, according to National Bureau of Statistics data released last Wednesday.
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