London- Britain’s inflation rate rose to a new 40-year high of 10.1% in July, a faster pace than the US and Europe. Meal in prices United Kingdom Due to the rising cost of energy, the cost of living has been reduced.
The Office for National Statistics said on Wednesday that double-digit growth in consumer prices from a year ago exceeded analysts’ central forecast of 9.8% and an annualized rate of 9.4% in June. This increase was mainly due to rising prices of food and staples, including toilet paper and toothbrushes.
Most economists believe that the times to come will be worse. The Bank of England says a hike in natural gas prices is likely to push consumer price inflation to 13.3% in October. It said it would push Britain into a recession, which is expected to last until 2023.
Those pressures persuaded the bank to raise its key interest rate by half a percentage point this month, the biggest increase for six in a row since December. The rate is now at 1.75%, the highest since the depth of the global financial crisis in late 2008.
“We expect another 50bp (basis point) rate increase in September,” said James Smith, developed market economist and ING economics. “We won’t rule out another hike in November.”
Inflation is rising in many countries as Russia’s war in Ukraine has caused an unprecedented rise in energy prices around the world. Russia has reduced natural gas shipments to Europe in retaliation for the West’s support of Ukraine, triggering a crisis for the fossil fuel that powers factories and heats homes in winter.
The 19 countries that share the euro currency are at risk of a gas crisis, where inflation hit a record 8.9% in July. The United States has already seen two-quarters of an economic contraction, raising fears of a recession. US inflation eased somewhat to 8.5% in July, but is still close to a four-decade high.
UK Treasury chief Nadim Zahvi said: “I understand that times are tough, and people are concerned about the rise in prices that countries around the world are facing.”
“While there is no easy solution, we are helping where we can,” he said, adding that the 400-pound ($483) is paid for in homes that face huge energy bills. are doing.
Britain’s Conservative government is under pressure to do even more to help people deal with the crisis of livelihood. The average UK household fuel bill has risen more than 50% this year, and a further increase is due in October, when the average bill is projected to hit 3,500 pounds ($4,300) a year.
Prime Minister Boris Johnson is due to step down next month and says any new measures should be left to his successor. The favorite to replace her, Foreign Secretary Liz Truss, opposes the major intervention, saying she supports tax cuts on “handouts”.
The other contender, former Treasury chief Rishi Sunak, introduced a 25% windfall tax on oil and gas companies’ profits in May, hoping to raise several billion pounds to help fund payments for those with rising utility costs. Opposition politicians want the tax expanded to power firms – a move the truss strongly opposes, saying “I don’t think profit is a dirty word.”