Inflation in the UK has reached 9 percent, the highest rate in the last four decades.

You are currently viewing Inflation in the UK has reached 9 percent, the highest rate in the last four decades.

Britain’s Annual inflation rose to 9 percent Last month was a 40-year high, the Office for National Statistics said on Wednesday.

The annual change in the Consumer Price Index rose from 7 percent in March. The British were ready for a sharp rise in inflation in April after the government reset the cap on household gas and electricity bills. This price ceiling, designed to protect nearly 22 million households, rose 54 percent late last year, reflecting the rise in wholesale natural gas prices.

About three-quarters of the increase in the annual inflation rate in April was due to an increase in household bills, said Grant Fitzner, chief economist at the statistics agency.

Prices have also risen with increases in restaurants following the end of the pandemic period on VAT, a type of sales tax. Food prices also rose faster than last year.

Countries around the world are struggling with inflation levels they haven’t experienced in decades. In the United States, the inflation rate is near a 40-year high and is at a record high in the eurozone.

There are several important reasons. The reopening of economies following pandemic lockdowns has tightened supply chains and pushed prices higher as consumers buy more goods.

Also, the war in Ukraine raised concerns about energy supplies from Russia and disrupted exports of wheat and other agricultural products from Ukraine. Prices of oil, natural gas, metals, fertilizers and other commodities rose, darkening the outlook for the global economy and worsening food crises.

The rise in food prices has been particularly troubling for Andrew Bailey, the governor of the Bank of England, who has been tasked with keeping inflation at 2 percent. He told lawmakers on Monday he was worried about food prices as Ukraine was unable to export agricultural products.

“This is a big concern not only for this country, but also for the developing world,” he said. “Sorry to sound like an apocalypse for a moment, but that’s a big concern.”

While a sharp rise in the April inflation rate is expected in the UK, the pain of such rapid and increasingly widespread price increases will be felt by households, as will inflation. outperforms wage growth.

According to the data released on Tuesday, the payment excluding bonuses increased by 4.2 percent in the January-March period compared to the same period of the previous year. High bonus payouts kept overall payout rates above inflation, but these bonuses were limited to certain industries and were particularly strong in financial and business services.

For now, while a tight labor market isn’t enough to keep up with increases in food and energy prices, it adds to inflationary pressures as it encourages companies to pay workers more. The unemployment rate fell to 3.7 percent in March, with fewer jobless jobs than open jobs for the first time in records going back to 2001, the statistics office said on Tuesday.

Pressure on the government to support low-income people struggling to cope with the rising cost of living intensified. Prime minister Boris Johnson He said last week that more support will be announced in the coming months as the Treasury’s resistance to additional measures will diminish. softening.

Inflation is unlikely to peak. Economists expect another steep rise in the energy price cap when it resets again in October, reflecting the rise in energy prices since Russia’s invasion of Ukraine. The Bank of England expects the UK’s inflation rate to rise above 10 percent in the last quarter of the year.