UK inflation: it doesn’t go below double digits
Inflation in the UK remains in the double digits, very high, and food and housing prices are to blame . UK consumer price inflation fell to 10.1% year on year in March 2023, down from 10.4% the previous month, but slightly above market expectations of 9 .8%. The rate has remained above 10% for the seventh consecutive period and well above the Bank of England's 2% target for nearly two years, suggesting that policy makers may continue to raise borrowing costs to fight inflation. The main upward pressures came from food and soft drinks (19.1% against 18.0% in February), leisure and cultural activities (4.6% against 4.0%) and goods and miscellaneous services (6.7% against 6.6%). The cost of housing and utilities also continued to grow at a rapid pace (26.1% vs 26.6%), while inflation slowed for both transport (0.8% vs 2.9%) than for restaurants and hotels (11.3% vs 12.1%). The core inflation rate, which excludes volatile items such as energy and food, was unchanged at 6.2% in March, not far from September's record high of 6.5%.
Here is the trend with a one-year horizon:
This instead is a vision with a time horizon of 25 years, which shows how the surge in inflation is singular even in a long-term profile:
Core inflation, i.e. inflation excluding energy and agricultural product prices, is much lower, a sign that wage dynamics do not follow price trends
After all, British real wages are falling, with a -2.5% of real net remuneration in the last quarter of 2022.
Wages don't keep up with inflation, and this must pose serious questions to British rulers: How long can it hold up an economy where real wages are always lower? How long can a finance company survive when the real economy is in crisis? Let's remember 1929.
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The article UK inflation: it doesn't go below double digits comes from Scenari Economics .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/inflazione-uk-non-va-sotto-le-due-cifre/ on Wed, 19 Apr 2023 11:04:32 +0000.