UK inflation rises to highest level in almost 30 years at 5.4%

[dutchman]

The Bank of England had one job. It has failed spectacularly



Until fairly recently central bankers were deluding themselves that inflation was “transitory”. No longer. The Bank of England raised interest rates again on Thursday, returning to the pre-pandemic level of 0.75pc.

By historic standards, this is still extremely low, but don’t take its incremental movements as a sign of calm within the Bank.

Having ignored the very real prospect of inflation for so long, Threadneedle Street is now on the back foot, playing catch-up. Regardless of what actions it takes now, much of the economic pain cannot be mitigated.

Alongside its interest rate increase, voted through 8 -1 by the Monetary Policy Committee, the Bank also raised its inflation forecast, predicting it will hit 8pc this spring and “perhaps even higher later this year”.

This would suggest the UK is trailing, but soon to catch up to, US levels of inflation, which hit 7.9pc in January, a 40-year high, forcing the Federal Reserve to finally take action on Wednesday and implement its first rate hike since 2018.

Joe Biden has been trying to convince the American people that this is "Putin’s price hike", but prices in America were on the way up long before Vladimir Putin instructed his army to cross Ukraine’s border. The same is true in the UK.

It can be hard to muster up much sympathy for politicians these days, but it’s hard to deny that their plates have been full, with a pandemic, a hostile Russia and the day-to-day tasks that come with governing a nation.

The Bank of England, however, had one job: to target 2pc inflation. It failed spectacularly. Its actions now are late and uninspired. For that, we will all pay the price.

[rebbonk]

There is going to be a whole lot more bad news filter through over the coming months, and not just from the financial markets. The world has been fixated on a nasty flu type bug and has taken its eye off the rest of things.

The BoE has failed in the task it was given, but this was always going to happen at some stage. Interest rates have been kept artificially low by deliberate intervention and manipulation, this was always going to end badly. Unfortunately, this unravelling is going to hurt a lot of people and many are going to lose what little they actually have. Of course, it won't generally be those from the higher echelons of society that suffer but those at the bottom.

FWIW, quite a lot of today's problems can be traced back to the Thatcher years and the 'opening' up of things. Gordon Geko was very wrong when he said that 'Greed is good!'

[dutchman]

UK inflation hits 6.2%, the highest level in three decades



Britain’s cost of living squeeze intensified further last month, according to official figures showing inflation reached 6.2% in February – announced before Rishi Sunak’s spring statement.

Figures from the Office for National Statistics showed a jump in the government’s preferred measure of the cost of living from 5.5% in January, fuelled by the rising cost of petrol and diesel and a wide range of goods from food to toys and games.

The February inflation figure for the consumer prices index was higher than the 5.9% predicted by a Reuters poll of economists, illustrating the scale of the squeeze on UK households from soaring living costs.

According to the latest snapshot, soaring inflationary pressure was fuelled by rising costs for gas and electricity, as well as average petrol and diesel prices hitting record highs in a blow to motorists.

Prices for clothing, footwear, furniture and flooring all rose after the end of the traditional January sales on the high street, reversing a trend from a year earlier when prices dropped during the third nationwide Covid lockdown when many shops were forced to close.

The latest increase in the consumer prices index took the measure of inflation to the highest rate since March 1992, when it stood at 7.1%. Further increases are expected as higher motoring costs triggered by Russia’s invasion of Ukraine and April’s increase in domestic energy prices take effect.

Reflecting the potential for higher inflation in future, the ONS said the price of goods leaving UK factories had been rising substantially and was now at the highest rate for 14 years.

Matt Whittaker, the chief executive of Pro Bono Economics, said the latest inflation figures meant a typical single parent will face paying out an estimated additional £315 in food and heating this year compared with 2019, while bills for a family of four are likely to jump by £580.

“With inflation driven by staples such as food and fuel, the everyday impacts of inflation will be felt most sharply by the poorest,” he said.

[rebbonk]

I would suggest that for most of us, 6.2% is rather on the 'light' side.

Recent changes have been made to the 'basket' of items included in the calculation of the inflation figures; you can bet that these changes are only to hide the real figures that most of us face.

[dutchman]

UK inflation rose to 7 per cent in March, hitting a fresh 30-year high after fuel prices surged and putting more pressure on the Bank of England to increase interest rates again.

The increase in consumer prices was up from an annual rate of 6.2 per cent in February and 10 times the 0.7 per cent recorded in March 2021, according to data published by the Office for National Statistics on Wednesday.

The reading was above the 6.7 per cent forecast by economists polled by Reuters, and the highest since March 1992, when it reached 7.1 per cent.

Grant Fitzner, ONS chief economist, said the rise in inflation was “broad-based” and added that among the largest increases were petrol costs, with prices mostly collected before the cut in fuel duty announced in the Spring Statement on March 23.

Prices of many items rose at a double-digit annual rate, including furniture, cooking oil, clothing, household utensils, second-hand cars, hotels and flight tickets. The increase reflects businesses passing on more of their rising costs while demand rebounded in some sectors following the easing of Covid-19 restrictions.

Food prices rose 5.9 per cent, the highest in a decade, with most types of food registering annual increases above 5 per cent, including bread, meat, milk and fruit.

[dutchman]

UK inflation rose to 7 per cent in March

OH NO IT DIDN'T!

That's the CONSUMER Price Index, the one the government uses to fix pensions and benefits.

The RETAIL Price Index, the figure the government used to use, rose by 9% in March!

https://www.ons.gov.uk/economy/inflatio ... /czbh/mm23

[rebbonk]

Who do they think they are fooling? This is yet more government waste. Maybe try being honest for once?

[dutchman]

More than half of Britons don't know what runaway inflation means for their savings - and some even think it will leave them better off



More than half of savers don't know what impact inflation will have on the real value of their cash savings over time, according to research by Legal & General.

Despite inflation continuing to climb to levels not seen since the early 90s - 7 per cent as of March - the research suggests a large number of Britons may be in for a nasty shock.

It found that 13 per cent believe inflation will leave them better off, while a similar proportion believe the real value of their savings would stay the same.

It also found that more than a quarter of Britons simply don't know what impact inflation could have on their cash.

Emma Byron, managing director at Legal & General Retirement Solutions said: 'Inflation is at its highest rate for three decades and it's worrying that savers don't realise it's eating away at millions of pounds sitting in low-interest paying accounts.

'Understanding the impact of inflation is crucial to understand how much money you have in real terms.

'Whilst it is essential to keep some cash in the bank for an emergency fund, savers might want to consider other options to make their money work harder.'

For someone stashing away £10,000 in an account paying next to nothing, they will see the purchasing power of their cash disintegrate if inflation continues at current levels.

For example, if prices rise by 7 per cent annually for the next five years, then the value of £10,000 will have the equivalent purchasing power of £7,220 in five years. In 11 years the real value of that £10,000 would have halved.

Even looking back, savers will see the brutal impact of inflation on their savings over the past year alone.

£10,000 stashed away in an account paying next to nothing in March last year would be worth the equivalent of £9,300 in purchasing power if you tried to spend it in March this year.

[rebbonk]

I think I believe this...

Soaring inflation rates have seen seasonal fruit and veg prices increase on average by 37% versus the same period in 2020, revealed data from the Government's Department for Environment, Food & Rural Affairs (DEFRA).

Rising food prices join a tsunami of cost increases, including an increase in VAT, national insurance and minimum wage contributions, that continue to suffocate the pub industry, with some fearing the rising cost of living poses greater threat to the sector than Covid.

The ongoing research from DEFRA studies weekly average wholesale prices charged for fruit and veg at wholesale markets in Birmingham, Bristol, Manchester and a London Market (New Spitalfields or Western International).
Of all the tracked fruit and veg, items in season this spring were most expensive: asparagus topped charts, skyrocketing 47% to £11.39 per kg the week commencing 19 April 2022, versus a mere £7.74 in the same week in 2020.

Fruits of labour
Out of the five most costly fruit and veg items, strawberries saw the biggest percentage rise of 80%, from £4.69 per kg in 2020 to £8.42 in 2022.

What's more, the price for a kg of rhubarb, the season for which begins in April and continues through to July, rests at £4.37 this week, seeing a rise of 19% compared to the same period in 2020.
Pak Choi, which can be harvested from late spring to late summer, was another vegetable that has seen rising prices. The food item's cost soared by 54% from £2.08 per kg in 2020 versus £3.20 in 2022.

No help or support
However, the fifth most expensive vegetable this season, curly kale, bucked the trend and is in fact cheaper this year in comparison to spring of 2020. The season for sowing kale begins in spring, with the leafy green plummeting by 17% in price per kg since 2020 from £4.12, to £3.41 this year.

The pub sector has expressed concern about rising prices. Bath Pub Company managing director Joe Cussens previously told The Morning Advertiser. "On top of the tsunami of other price rises, all of our suppliers building up their prices, we've got this massive increase in costs, with no help or support at all, or even words of encouragement from the Treasury."

Licensee of the Onslow Arms in Loxwood West Sussex, Rob Barr believed rising costs were a huge worry for the sector. "The real challenge is they are all coming at the same time and off the back of the pandemic, allowing for no real breathing space for us all," he said.

Source: https://www.morningadvertiser.co.uk/Article/2022/04/22/Inflation-How-much-have-fruit-and-veg-prices-risen-by

[dutchman]

Asparagus was something like £3.37 at Morrisons this evening!