LONDON
\nInflation in the UK soared to a 40-year high of 9 percent in April as food and energy prices spiralled, official figures revealed Wednesday, escalating the country\u2019s cost-of-living crisis.
\nThe 9pc rise in the consumer price index is the highest since records began in their current form in 1989, outstripping the 8.4pc annual rise posted in March 1992 and well ahead of the 7% seen in March of this year. The UK\u2019s Office for National Statistics also said its estimates suggest that inflation would have last been higher \u201csometime around 1982.\u201d
\nFrom April 1, the UK energy regulator increased the household energy price cap by 54% following a surge in wholesale energy prices, including a record rise in global gas prices. The regulator, Ofgem, has not ruled out further increases to the cap at its periodic reviews this year.
\nThe Bank of England has hiked interest rates at four consecutive meetings, raising the cost of borrowing from its historic pandemic-era low of 0.1% to a 13-year high of 1%, as it looks to rein in runaway inflation without stomping out economic growth.
\nA recent survey showed that a quarter of Britons have resorted to skipping meals as inflationary pressures and a food crisis conflate what Bank of England Governor Andrew Bailey has dubbed an \u201capocalyptic\u201d outlook for consumers.
\nWednesday\u2019s mammoth inflation print delivers another \u201chammer blow\u201d to households already worried about the cost of living, and there are warnings that the worst is yet to come.
\n\u201cFor the first time since records began, there are fewer people unemployed than there are job vacancies and the unemployment rate now sits at a nearly 50-year low, and workers are capitalizing on their increased bargaining power to ask employers to raise pay to cope with higher living costs, with wage growth now running at 7%,\u201d noted Ambrose Crofton, global market strategist at JPMorgan Asset Management.
\n\u201cThe risk is that should [the Bank of England] raise interest rates too quickly at a time when consumers are already feeling the pinch, then this could crimp demand and push the economy into recession. Doing too little, however, risks entrenching inflation expectations and driving a more persistent wage-price feedback loop.\u201d
\nThe British Chambers of Commerce warned following Wednesday\u2019s announcement that the \u201ceye-watering\u201d inflation rate and cost-of-living crisis facing households is damaging firms\u2019 ability to invest and operate at full capacity.
\n\u201cThe scale at which inflation is damaging key drivers of U.K. output, including consumer spending and business investment, is unprecedented and means there is a real chance the U.K. will be in recession by the third quarter of the year,\u201d said Suren Thiru, head of economics at the BCC, in a note.<\/p>\n","protected":false},"excerpt":{"rendered":"
LONDON Inflation in the UK soared to a 40-year high of 9 percent in April as food and energy prices spiralled, official figures revealed Wednesday, escalating the country\u2019s cost-of-living crisis. The 9pc rise in the consumer price index is the highest since records began in their current form in 1989, outstripping the 8.4pc annual rise […]<\/p>\n","protected":false},"author":2,"featured_media":261309,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[210,308],"class_list":{"0":"post-261297","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-inflation","9":"tag-uk"},"yoast_head":"\n