UK Inflation Surges to 3.2% As Food and Transport Costs Rise
- According to recent news, inflation in the UK in August jumped faster in one month than at any time since the Bank of England gained independence to set interest rates, rising 1.2 percentage points to 3.2 percent, its highest level since 2012
- This undermines the central bank’s view that price rises are manageable and temporary, as continued surges are likely in autumn, adding a serious squeeze on living standards
- Overall an inflationary outlook, as recruitment difficulties, cost pressures for businesses, supply chain issues and structural changes post-Covid seem to be pointing towards higher inflation until at least the end of this year
Inflation Fears Rise Sharply as Confidence in Bank of England Drops
- According to the BoE’s quarterly survey of attitudes to inflation, more people were satisfied than dissatisfied with the BoE’s performance, but only a third of people said they thought it was doing a good job in keeping prices under control
- The 33 per cent satisfaction score was the lowest level since the survey started in 1999 and has only been hit once before in November 2011
- Overall a dark short to mid term outlook, as public concerns about inflation rose sharply in August as satisfaction with the Bank of England’s control of prices sank to its lowest level in a decade
Retail Sales in Britain Fall Unexpectedly for Fourth Month
- According to data from the Office for National Statistics, the volume of monthly retail unexpectedly contracted 0.9 percent between July and August for the fourth consecutive month. This followed a sharp contraction in July and missed the 0.5 percent expansion forecast
- Overall an uncertain outlook, as concerns rise among some economists over the pace of the post-pandemic recovery and the bank’s ability and willingness to control rising inflation
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