Global Statistics

All countries
704,753,890
Confirmed
Updated on May 20, 2024 1:53 am
All countries
560,567,666
Recovered
Updated on May 20, 2024 1:53 am
All countries
7,010,681
Deaths
Updated on May 20, 2024 1:53 am

Global Statistics

All countries
704,753,890
Confirmed
Updated on May 20, 2024 1:53 am
All countries
560,567,666
Recovered
Updated on May 20, 2024 1:53 am
All countries
7,010,681
Deaths
Updated on May 20, 2024 1:53 am
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UK inflation remains unchanged at 6.7% in September

In September, the UK experienced stable inflation at 6.7%, according to official data released on Wednesday. This steadiness was due to a decrease in food and drink prices, which balanced out the higher costs at the pump for motorists. The flat reading, contrary to most economists’ expectations of a slight decrease, disappointed experts. This inflation rate remains more than three times higher than the Bank of England’s target of 2%. Despite this, the bank is not anticipated to raise interest rates at its upcoming policy meeting in early November, choosing instead to maintain the borrowing rate at its 15-year high of 5.25%.

The Bank of England recently concluded a period of almost two years of interest rate hikes as inflation dropped from multi-decade highs exceeding 11%. Many economists predict a substantial decline in inflation next month. James Smith, research director at the Resolution Foundation think tank, stated, “Progress on falling inflation has stalled, for one month at least. It should fall sharply next month to below 5%, as energy prices fall for most people.”

Central banks, including the Bank of England, have aggressively raised interest rates from near zero to counter price increases triggered initially by supply chain disruptions during the pandemic and later exacerbated by Russia’s invasion of Ukraine, which drove up food and energy expenses. These higher interest rates, which discourage borrowing and spending, have contributed to lowering inflation globally. While most economies have managed to avoid recession, concerns persist that the British economy might contract in the coming months, presenting a challenging scenario for the governing Conservative Party in the lead-up to a general election.

Compared to other Group of Seven industrialized nations, the UK currently has the highest inflation rate, with the US standing at 3.7%. Some economists attribute this to the UK’s departure from the European Union, which has led to labor shortages in certain sectors and trade frictions, thereby increasing costs for businesses.

The unchanged inflation rate raises worries, particularly among homeowners, that rates will remain elevated for an extended period. Due to the time lag between actual rate hikes and adjustments in mortgage rates, many homeowners and renters have yet to experience increases in their housing costs. Unlike in the US, where homeowners often secure fixed-rate mortgages for several years, most homeowners in the UK lock in rates for only a short period. Therefore, those whose mortgage deals are expiring soon anticipate significantly higher borrowing costs due to the substantial rise in interest rates over the past couple of years.

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