Connect with us

Hi, what are you looking for?

World News

UK inflation reaches a 30-year high

LONDON (Transatlantic Today) – Higher energy costs, rising demand, and supply chain concerns drove up consumer prices in December, pushing the UK inflation rate to a 30-year high.

Inflation touched an annual 5.4 percent, its highest figure since March 1992 and up from 5.1 percent in November, itself to be a decade high. Reuters surveyed economists, who predicted a 5.2 percent increase.

Consumer prices increased 0.5 percent on a monthly basis, exceeding economist expectations of a 0.3 percent increase.

The rising cost of living has fueled speculation that the Bank of England would raise interest rates once more. According to CNBC, the Bank of England has become the first major national bank to start raising borrowing costs from pandemic-era lows in December.

Following the 15-basis-point rise to 0.25 percent in December, markets will be monitoring the Monetary Policy Committee’s next meeting on Feb. 3. Policymakers are expected to contemplate another rate hike.

The Bank is also working in a labor market that is unusually tight, with vacancies at an all-time high and employment still below pre-pandemic levels.

The Bank of England’s decision to raise rates was validated by December’s data, according to Paul Craig, portfolio manager at Quilter Investors, but February’s meeting may still go anyway.

On Tuesday, the Department for National Statistics released numbers showing a yearly wage increase of 3.8 percent in December, meaning that workers are seeing an actual pay fall, and Craig stated that there is clearly a “very real concern” that in-work impoverishment is increasing.

According to the ONS, the Consumer Prices Index, which includes owner-occupier housing expenses (CPIH), increased by 4.8 percent in the year to December, up from 4.6 percent in November and the highest level since September 2008. Housing and domestic services, as well as transportation, contributed the most.

The Bank of England’s dissatisfaction with its present policy position will be exacerbated by upside surprises in both headline and core inflation readings, according to Ambrose Crofton, a global market strategist at JPMorgan Asset Management.

 “There is no doubt that prices are being boosted by factors that should moderate in time, including surging energy costs and supply chain problems,” Crofton noted.

Wage increases, he said, will “ease the pinch” of rising prices, but they could also fuel a period of above-target inflation.

You May Also Like

World News

Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum.


Ukrainian officials have spoken of establishing territorial defense units and partisan warfare, but they admit that these resources are insufficient to thwart a Russian...


As Russia continues its invasion of Ukraine, it does so while featuring neo-nazi mercenaries from groups like the Wagner Group and others.

Capitol Hill Politics

Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam, eaque ipsa quae.