British inflation above 10%. Truss is Chancellor in name, not in fact
Bad news for British Prime Minister Liz Truss, now in command more in name than in fate after the new Chancellor of the Exchequer, Jeremy Hunt, imposed a radical change in the party's political line.
The UK's annual inflation rate rose to 10.1% in September 2022 from 9.9% in August, returning to 40-year highs in July and exceeding market expectations of a 10% rate . The largest contribution to the increase was made by food (14.8% compared to 13.4% in August), in particular oils and fats and dairy products. Consumer costs also increased significantly for housing and public utilities (20.2% against 20%), due to the surge in electricity, gas and fuel prices. The annual base rate, which excludes energy, food, alcohol and tobacco, has risen to a record level of 6.5% compared to expectations of 6.4%, so that a spiral of inflation is beginning to loom wages. On a monthly basis, consumer prices increased by 0.5% in September. Here is the graph
Bad news for British fixed-income families, as the new Chancellor of the Exchequer, now master of the British economy, has canceled at least two-thirds of his predecessor Kwazi Kwarteng, a Truss man, and is preparing actions that have a great impact on the lives of citizens. There is also talk of intervention on pensions, with the cut, according to FT , of the so-called "triple lock" that links pensions and inflation in a solid way. It also eliminated a £ 6 billion cut in the base rate of income tax, along with changes to dividend taxes, self-employment taxes, a VAT tax break for foreign buyers and a freeze on alcohol tax, saving around £ 5 billion. Truss had already eliminated tax cuts for big business and the rich, saving £ 21 billion. In short, a massacre of the previous promised fiscal policy.
The Conservative party, which has eaten back a good part of its tax cut program, is in revolt: some MPs have already expressed their distrust of Truss, which if it goes on like this risks being a Prime Minister who risks very short-lived. Also because the nostalgia for Boris Johnson is still great, very much.
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The article British inflation above 10%. Truss is Chancellor by name, not in fact it comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/inflazione-britannica-sopra-il-10-la-truss-e-cancelliere-di-nome-non-di-fatto/ on Wed, 19 Oct 2022 08:30:55 +0000.