Displaying items by tag: inflation

The UK inflation rate surged to 2.6% in November, its highest level in eight months, driven by rising fuel and clothing costs, as well as higher ticket prices for events. This marks the second consecutive month of rising inflation, dampening hopes for an interest rate cut by the Bank of England. Rachel Reeves acknowledged the ongoing struggles of working families, vowing to alleviate financial pressures. However, critics blamed recent government policies for exacerbating inflationary pressures, which could prolong elevated mortgage rates. Many companies are grappling with rising fuel, utility, and wage costs, while households continue to face increased expenses on food, rent, and essentials. Economists predict the Bank of England will keep interest rates steady at 4.75% to curb inflation. While inflation is expected to fluctuate in the coming months, experts forecast a return to the Bank’s 2% target by the end of next year.

UK business confidence has fallen to its lowest level since the early days of the Covid pandemic, according to the Institute of Directors (IoD). November’s economic confidence index dropped to -65, the lowest since April 2020’s record low of -69. This follows the government's autumn budget, which introduced £40 billion in tax increases, including £25 billion from higher national insurance contributions (NICs) for employers. Business leaders warn these measures will hinder private sector growth, with many firms anticipating reduced investment and workforce cuts. UK hospitality businesses have voiced concerns about closures and reduced investment due to the NIC hikes. IoD chief economist Anna Leach criticised the budget for undermining economic foundations and damaging businesses’ ability to grow. Chancellor Rachel Reeves defended the budget as necessary for stabilising public finances. The IoD hopes upcoming announcements on industrial strategy, infrastructure, and tax reform will boost economic prospects. See

UK inflation rose by more than expected to 2.3% for October, exceeding the official 2% target. This rise, up from 1.7% in September, reflects increased energy costs following a 10% hike in the energy price cap and higher prices for food and products like stamps. This news comes amid concerns about inflationary pressures, potentially influenced by global factors such as Donald Trump’s trade policies. The Bank of England’s monetary policy committee (MPC) will weigh these figures in December to decide whether to adjust interest rates further. In early November, the MPC cut the base rate to 4.75%. Additional government spending and tax adjustments from chancellor Rachel Reeves' recent budget may also drive up short-term inflation. One commentator thinks that the impact of Trump’s policies will likely have limited effects on UK GDP and inflation, even under extreme scenarios. Analysts predict the UK base rate could drop to 3.75% by late 2025.

In September, UK inflation unexpectedly fell to 1.7%, the lowest rate in 3.5 years, down from 2.2% in August. Lower airfares and petrol prices were the main factors behind this slowdown. The inflation rate now stands below the Bank of England's 2% target, opening the door for potential interest rate cuts. The bank, which has already lowered interest rates once this year, is expected to cut them again in November by 0.25%, with another cut likely in December. While lower inflation is good news for many, economists warn that inflation could rise again due to increased household energy bills. The drop in inflation will also impact the rise of benefits like universal credit, though this will be lower than the expected 4.1% rise in the state pension. Despite the positive signs, the cost of living remains challenging, particularly for low-income families struggling to balance essential expenses like food and heating.

Inflation in Argentina has slowed for the fourth consecutive month, despite an annual rate nearing 300%. The monthly inflation rate rose by 8.8% in April, down from 11% in March. This is seen as a victory for Javier Milei; when he became president in December, monthly inflation was over 25%. His administration has implemented strict austerity measures to stabilise the economy, including slashing public spending, cutting 50,000 public jobs, suspending new public works contracts, and removing fuel and transport subsidies. These measures have been praised by investors and the International Monetary Fund (IMF), which announced an $800 million loan for Argentina. However, some experts argue that the falling inflation is due to a significant decline in private spending, as the poor and working classes are severely impacted. Poverty levels are nearing 50%, with a drop in economic activity and consumption. Critics say Milei's policies have disproportionately affected vulnerable populations. Despite decreasing inflation, Argentina's GDP is expected to shrink by 2.8% this year, indicating a painful recession.

Nigeria is grappling with a severe fuel shortage, exacerbating the hardships faced by its citizens (especially those reliant on public transport). Long queues for fuel have emerged in major cities, and prices have surged by over 15%. Authorities attribute the shortage to logistical challenges disrupting supply chains. Despite being a top crude oil producer in Africa, Nigeria frequently experiences petrol shortages due to strikes and supply disruptions. The state oil firm has accused fuel companies of exploiting the situation for profit. While Nigeria recently opened Africa's largest refinery in Lagos, it currently only produces diesel and aviation fuel. With the inflation rate over 30%, the government has just announced a 35% pay increase for civil servants, but the monthly minimum salary rate is still unchanged. See

The UK's unemployment rate surged unexpectedly to 4.2% in the three months to February, up from 3.9% in January, the highest level in nearly six months. This increase, alongside a slowdown in earnings growth, reflects economic uncertainty affecting the job market. Real wages rose by 2.1% due to falling inflation. Economists suggest these weaker-than-expected employment figures may prompt the Bank of England to consider interest rate cuts as early as June. HMRC data revealed a significant decline in workers on payrolls by 67,000 in March, the largest drop since November 2020. Vacancies also decreased for the 21st consecutive period. While recent output data suggests potential economic growth in the first quarter, the Office for National Statistics (ONS) advises caution in interpreting unemployment rate data due to low survey response rates. There are also concerns over industrial action and increasing inactivity rates. Acting shadow work and pensions secretary Alison McGovern said:  'Tory failure is laid bare by the reality that we are now the only country in the G7 with an employment rate stuck below pre-pandemic levels’. See also

The British Chambers of Commerce (BCC) have reported that nearly half of UK businesses plan to raise prices soon, despite overall inflation pressures easing. Their survey, covering 4,800 firms, found 46% expecting to increase prices, 51% planning to maintain current prices, and only 3% foreseeing a reduction. This pricing trend is linked to economic challenges affecting business investment, which remains sluggish. A significant factor is the higher labour costs, particularly in the hospitality and manufacturing sectors; 77% and 76% of firms respectively cite it as a major influence on pricing decisions. Additionally, the survey indicates a stagnant landscape for business investment. Most firms reported no change in their investments in new equipment and machinery this quarter: only 24% have increased their investment, while 16% noted a decrease.

UK inflation has dropped to 3.4%, the lowest in over two and a half years, potentially signalling a Bank of England (BoE) interest rate cut this summer. This decrease, primarily driven by slower food price increases, may lead to cheaper mortgages, providing relief to homeowners. Initially predicted at 3.5%, the February inflation rate was pleasantly surprising, especially as food inflation fell to 5% from 7% in January. The decline supports Rishi Sunak's commitment to reduce inflation, and aligns with the BoE's target of 2%. This news prompted NatWest to lower mortgage rates even before the BoE's decision. Financial markets expect the BoE to maintain the current 5.25% interest rate, but the reduced inflation increases the likelihood of a summer cut, which could significantly lower mortgage payments. However, renters face contrasting challenges, with rental costs rising at record rates due to market constraints. The average UK rent soared by 9% over the past year. As homeowners anticipate potential financial relief, renters continue to struggle with escalating living expenses.

Inflation in the UK has unexpectedly risen to 4% in the year to December, surpassing economists' predictions of a decrease to 3.8%. This increase from November's 3.9% was primarily driven by higher tobacco and alcohol costs, following a government hike in smoking duties. The latest figures from the Office for National Statistics (ONS) do not yet reflect the full impact of increased shipping costs due to Red Sea diversions, triggered by Houthi attacks on commercial ships and subsequent UK and US airstrikes. These disruptions are expected to significantly raise goods prices into Europe, according to DP World's chief financial officer Yuvraj Narayan.Retail chains have responded by offering more sales.The Bank of England, striving to control inflation, has maintained a base interest rate of 5.25% since August. Core inflation, excluding volatile items like food and energy, remains at 5.1%, with food inflation dropping from 9.2% to 8%.Chancellor Jeremy Hunt acknowledges the uneven path of inflation reduction, emphasising the need for economic stability. Labour's Rachel Reeves and the Liberal Democrats' Sarah Olney highlighted the ongoing strain on families due to rising living costs.