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

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

Postby dutchman » Wed May 25, 2022 4:26 am

Morrisons becomes the fourth major retailer to hike meal deal prices this year - here's how it compares

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Morrisons has increased the cost of its meal deal by 50p from £3 to £3.50, making it the fourth major retailer to up prices this year. Here's how it compares.

Until this week, when the price hike was introduced in stores and online, Morrisons had jointly offered the cheapest meal deal on the high street. The price increase now puts it on a par with Sainsbury's and Tesco for non-Clubcard holders. Only Tesco Clubcard users can now pick-up a meal deal - which typically includes a sandwich or wrap, snack and drink - for less than £3.50.

The shake-up follows a number of other meal deal price hikes. In March, Boots increased prices from £3.39 to £3.59 outside of London, and from £3.99 to £4.19 in London. Meanwhile, Co-op upped prices from £3.50 to £3.75 in February, and Tesco increased costs from £3 to £3.50, also in February - but only for those who don't have a Clubcard. See the table below for a full round-up.

Morrisons said it's the first increase to the price of its meal deal in over two years. In addition, Morrisons has also introduced a new £4 meal deal, which includes sandwiches from its "The Best Sandwich" range.

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

Postby dutchman » Fri Jun 10, 2022 6:14 pm

Confidence in the Bank of England sinks to all-time low

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Public confidence in the Bank of England has slumped to an all-time low in another setback for its Governor, Andrew Bailey.

For the first time, more people are dissatisfied than satisfied with Threadneedle Street’s efforts at controlling inflation, according to the Bank’s quarterly inflation attitudes survey.

Just 25pc of respondents said they were pleased with the Bank’s performance, the lowest since the survey began in 1999.

The public is also the most pessimistic about inflation on record, anticipating price increases of 4.6pc in the shops over the next 12 months.

The results turn up the heat on Mr Bailey and the Monetary Policy Committee, which is expected to bump interest rates to 1.25pc at its meeting next week.

Andrew Sentance, a senior adviser at Cambridge Econometrics and former MPC member, said the Bank “has not really communicated and demonstrated that it is trying to control inflation”.

UK inflation reached 9pc in the year to April, the highest reading in 40 years and four-and-a-half times the Bank’s 2pc target.

Economists have warned annual price rises may break into the double figures later this year when another increase in the energy price cap kicks in.

The Governor has come under intense criticism for failing to see off the current crisis, although the Bank’s defenders argue that many of the cost increases are being driven by external factors including the conflict in Ukraine.

Conservative MP Mel Stride, chair of the Treasury Select Committee, said the drop in public confidence was to be expected.

“With inflation forecast to reach 10pc, against a target of 2pc, it can’t be a surprise that the public are increasingly sceptical as to whether the Bank has got a firm enough grip on rising prices,” he said.

“Worryingly, the survey shows the public expect future inflation to be higher than they did when they were asked back in February. This continued de-anchoring of future inflation expectations away from the two per cent target combined with a very tight labour market poses a real risk of the UK tipping into a wage-price spiral.”

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

Postby dutchman » Thu Jun 16, 2022 4:15 pm

Bank: Inflation will hit 11% in October

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The Bank of England has raised its inflation forecast again, and now predicts it will hit 11% this autumn, when energy bills rise.

It had previously estimated that consumer price inflation would hit 10% – far over its 2% target. This new forecast shows that households face even more pain, with real wages already lagging inflation.

Announcing today’s interest rate rise to 1.25%, the Bank says:

CPI inflation is expected to be over 9% during the next few months and to rise to slightly above 11% in October.

The increase in October reflects higher projected household energy prices following a prospective additional large increase in the Ofgem price cap.

The Bank explains the surge in inflation is partly due to rising global energy – greatly exacerbated by the war in Ukraine – and other tradable goods prices.

But there are also domestic factors, including “the tight labour market and the pricing strategies of firms”.

Consumer services price inflation, which is more influenced by domestic costs than goods price inflation, has strengthened in recent months.

In addition, core consumer goods price inflation is higher in the United Kingdom than in the euro area and in the United States.


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

Postby rebbonk » Thu Jun 16, 2022 6:21 pm

...predicts it will hit 11% this autumn...


If you bother to talk to the average housewife (sorry I'm being sexist) you will find that it has already surpassed 11%. :fuming: :fuming: :fuming:
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Re: UK inflation rises to highest level in almost 30 years at 5.4%

Postby dutchman » Thu Jun 16, 2022 6:34 pm

A quarter per cent rise in interest rates isn't going to make any difference to inflation either.

Imports are measured in US Dollars and the Bank of England Rate needed to rise by at least three-quarters of a per cent for the Pound to keep pace with the Dollar.
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Re: UK inflation rises to highest level in almost 30 years at 5.4%

Postby dutchman » Mon Jun 20, 2022 3:29 am

Bank of England’s independence is at risk if it fails to curb inflation

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Having woefully misjudged inflation over the last year and more, the Bank’s Monetary Policy Committee (MPC) had a chance to demonstrate its determination to contain price pressures by raising rates decisively. It failed.

On Wednesday, the Federal Reserve jacked up US rates 0.75 percentage points, surprising many, with rate setters in Washington warning that faster, quicker rate hikes might be needed. That’s why the dollar strengthened, making imports into America cheaper – helping to tackle the very inflationary pressures the US central bank is striving to overcome.

Over in London, the Fed’s MPC counterparts did something different. Our nine-strong committee could also have grasped the inflation bull by the horns, making a bold, eye-catching move, amplifying the message Western policymakers are resolute that inflation will be contained before it gets out of control.

Instead, the career civil servants who dominate the MPC displayed the same head-in-the-sand behaviour that has cost the Bank of England so much of its inflation-fighting credibility over recent months. With the UK’s economic predicament set to get worse before it gets better, that’s hard-won credibility we can ill afford to lose.

The UK’s headline consumer price index in April was 9pc up on the same month last year – over four times the MPC’s 2pc inflation target. The alternative retail price index was 11.1pc higher. April’s producer price index – capturing supply-chain cost pressures, pointing to future headline inflation – was no less than 18.6pc up on a year ago. And when the May figures are published on Wednesday, all these inflation measures will be higher still.

Given that, it strikes me as astonishing that the MPC voted 6-3 to raise borrowing costs by a mere 0.25 percentage points. With rates at just 1.25pc, way below inflation and deeply negative in real terms, monetary policy remains ultra-loose. That makes no sense, given that Threadneedle Street is now forecasting CPI inflation will peak at 11pc this autumn – which means the RPI measure, which the Bank used to target, could well hit 14pc. And, given that the MPC has been forced to raise its inflation forecast seven times since last March, the actual inflation peak is likely to be higher still.

The reality is that our central bank has been hopelessly “behind the curve” for well over a year. It was clear back in March 2021 inflation would become a major problem as the UK emerged from lockdown. Crude oil was already $70 a barrel, 90pc up over the previous 12 months. With labour costs rising across Asia, the age of cheap Chinese goods was over.

Having dropped the ball in May, the MPC has just made the same mistake again – this time, despite the Federal Reserve obliging with its own 75 basis points increase the day before. The US federal-funds rate is now 1.5-1.75pc. The MPC, faced with an open goal last week, could have matched that level, tucking in behind the Fed with a 50 basis points increase, declaring with serious intent that double-digit consumer inflation will not be tolerated. Our rate-setters hit the corner flag instead.

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

Postby dutchman » Wed Jun 22, 2022 10:50 am

UK inflation hits 9.1% as prices rise at fastest rate for 40 years

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Prices are continuing to rise at their fastest rate for 40 years as food, energy and fuel costs climb.

UK inflation, the rate at which prices rise, edged up to 9.1% in the 12 months to May, from 9% in April, the Office for National Statistics (ONS) said.

Food price rises, particular for bread, cereal and meat, were a big factor in the latest rise, the ONS said.

Cost of living pressures have led to unions and workers calling for pay rises.

But the government has warned against employers handing out big increases in salaries over fears of a 1970s style "inflationary spiral", where prices continued to rise as wages went up.

Currently, inflation is at the highest level since March 1982, when it also stood at 9.1% and the Bank of England has warned it will reach 11% this year.

Inflation is the pace at which prices are rising. For example, if a bottle of milk costs £1 and that rises by 5p compared with a year earlier, then milk inflation is 5%.

In a BBC-commissioned survey of more than 4,000 people, 82% said they thought their wages should increase to match the rising price of goods and services.

Households were hit by an unprecedented £700-a-year increase in energy costs in April, and fuel price rises in June mean it costs more than £100 to fill an average family car with petrol.

The ONS said rising prices for food and non-alcoholic beverages helped fuel inflation in May.

Russia's war in Ukraine has severely restricted wheat and maize supplies, which are used to make bread and cereals, from two of the world's biggest exporters.

Ukraine is also a major producer of of sunflower oil, meaning to the costs of alternatives have also climbed.

Market reach firm Kantar has forecast that the average annual grocery bill in the UK is set to rise by £380 this year.

Supermarket Asda told the BBC some shoppers are setting £30 limits at checkouts and petrol pumps, with customers are putting less in their baskets and switching to budget ranges.

Grant Fitzner, chief economist at the ONS, said the prices of goods leaving factories rose at their fastest rate in 45 years in May, driven by "widespread food price rises".

Mr Fitzner added the cost of raw materials "leapt at their fastest rate on record".

But he said the steep rises in food and record high petrol prices in May had been stemmed by the price of clothes rising less than they did this time last year, along with a drop in computer game costs.

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

Postby rebbonk » Wed Jun 22, 2022 1:20 pm

Nothing to do with unnecessary lockdowns, printing and handing money out like confetti, then? It's high time that the shower of sh*t that sits in the cabinet office accepts responsibility for creating the present economic woes that they have inflicted on the country. :fuming: :fuming: :fuming:
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Re: UK inflation rises to highest level in almost 30 years at 5.4%

Postby dutchman » Thu Jun 30, 2022 5:24 am

UK will face worse inflation than other major economies, says Bank governor

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Britons should expect to suffer a more severe bout of inflation than other major economies during the current energy crisis, the governor of the Bank of England has warned.

Speaking at a conference of central bankers in Portugal, Andrew Bailey said inflation was higher in the UK and would persist for longer than previously expected as soaring petrol and gas prices sent household bills rocketing to new highs.

Bailey said he was determined to bring down inflation and was prepared to use the Bank’s power to increase interest rates aggressively in response, though he added that it may not be necessary if price growth slowed towards the end of the year.

“I think the UK economy is probably weakening rather earlier and somewhat more than others,” he said. “There will be circumstances in which we will have to do more. We’re not there yet in terms of the next meeting. We’re still a month away, but that’s on the table. But you shouldn’t assume its the only thing on the table – that’s the key point,” he added.

Bailey said Covid had left a “structural legacy” in the UK jobs market, where companies have struggled with a lack of workers, while inflation would also be influenced by the remaking of international supply chains in response to geopolitical tensions and to deal with global heating.

While warning that there were signs of slowing economic growth in Britain, Bailey did not rule out raising rates by 50 basis points at the Bank’s next meeting in August and said it had the option of taking forceful action.“

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

Postby rebbonk » Thu Jun 30, 2022 1:30 pm

Bailey, like a lot of the previous Governors is simply not up to the job.

But, I wonder how many don't realise that the BOE is nothing to do with the government and is a private independent concern?
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