Category Archives: Inflation

Boris Johnson ‘choosing to let people struggle’ with cost of living says Keir Starmer – as it happened

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This live blog is now closed. You can find our latest cost of living stories below:

Anne-Marie Trevelyan, the international trade secretary, has warned that inflation will experience a further “bump” before prices are likely to stabilise.

In a Q&A after delivering a speech on green trade at Bloomberg’s HQ in London, she said countries around the world were facing a “a global battle against inflation”. She went on:

This is something we have to tackle across the board.

And the worry we always have is that inflation tends to have two bumps to it.

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Why does the UK have the highest inflation in the G7?

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Analysis: UK among hardest-hit countries thanks to perfect storm of war in Ukraine, Covid and Brexit

Britain’s inflation rate has soared to the highest level since the early 1980s. After a record increase in gas and electricity bills in April, inflation is the highest in the G7. Having reached 9% last month, it is above the 8.3% rate in the US and Germany’s reading of 7.4%. Japan, an economy characterised by low inflation for decades thanks to an ageing population, has the lowest rate at 1.2%.

Here are some of the reasons why prices are rising faster in the UK than in other major economies.

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Ukraine farming group calls for urgent end to ports blockade

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Group warns of ‘cascade of export bans’ amid failure to ease grain bottlenecks fuelling shortages and inflation, MHP said

One of Ukraine’s largest farming groups has called for an urgent solution to unblock the country’s Black Sea ports as exports of grain, sunflower and rapeseed are being held up by the Russian naval blockade, driving inflation and shortages around the world.

G7 ministers have held urgent talks about trying to open routes through Romanian and Baltic ports, potentially fed with an army of 10,000 trucks making a five-day trip from Ukraine.

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Boris Johnson claims planned Northern Ireland protocol law is ‘insurance’ in case talks fail – live

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Latest updates: UK prime minister meets Sinn Féin and DUP as Mary Lou McDonald suggests forming Stormont assembly is not UK government priority

This is from my colleague Jennifer Rankin in Brussels on the UK government’s mixed messaging over the Northern Ireland protocol.

Taoiseach Micheál Martin and Sinn Féin’s leader in Northern Ireland, Michelle O’Neill, have said they recognise there are “serious issues” in relation to the implementation of the Brexit protocol that Boris Johnson is planning to override in part.

They expressed serious concern about possible unilateral moves on the protocol by the British government, which would have a destabilising impact on Northern Ireland.

They recognised that there are genuine issues regarding aspects of the implementation of the protocol but these can be taken forward in the context of EU-UK discussions.

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‘Apocalyptic’ food prices will be disastrous for world’s poor, says Bank governor

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Bank of England’s Andrew Bailey blames UK’s highest inflation rate for three decades on Russia-Ukraine war

The Bank of England governor has blamed the war in Ukraine for the highest inflation in the UK for three decades and warned that “apocalyptic” food prices caused by Russia’s invasion could have a disastrous impact on the world’s poor.

Giving evidence to MPs, Andrew Bailey said while he was unhappy about the level of price rises, 80% of the inflation overshoot was caused by factors outside the Bank’s control.

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John Lewis boss calls for Covid-style cost of living aid package

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Dame Sharon White follows Tesco chief in urging UK government to help with rising energy and grocery bills

The boss of John Lewis has urged the governmentto intervene with a financial package of support to protect families from the cost of living crisis on the same scale as it did to help the nation deal with the Covid pandemic.

Dame Sharon White, a former second permanent secretary at the Treasury, said the government needed to act urgently as families struggle to pay utility and food costs as energy bills and inflation soars.

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US inflation rate slows but remains close to 40-year high

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Consumer price index reveals costs rising by a monthly rate of 0.3% in April, down from 1.2% in March, the first fall since August 2021

Price rises slowed in the US in April but the annual inflation rate remained close to a 40-year high, leaving many Americans struggling to afford necessities including food, shelter and fuel.

The latest consumer price index (CPI) figures – which measure a broad range of goods and services – showed prices rising by a monthly rate of 0.3% in April, down from 1.2% in March, the first fall since August 2021.

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Bank of England ‘duty bound’ to trigger recession to curb inflation

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Ex-official says policymakers must shrink the UK economy to limit upward pressure on prices made worse by Brexit

Britain’s central bank policymakers are “duty bound” when they meet this week to push the UK into recession to cap rising inflation, a former Bank of England (BoE) official has said.

Adam Posen, who runs Washington-based thinktank the Peterson Institute, said that while the Bank of England would not want workers to lose their jobs, it should hike interest rates now to squeeze out inflationary pressures made worse by Brexit trade and immigration restrictions.

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Rising feed prices mean chicken could soon cost as much as beef, says Co-op

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Price of UK’s most popular meat is rising faster than any other protein, according to retailer’s boss

Chicken’s relative affordability has helped make it the country’s meat of choice but one of the UK’s biggest food retailers has warned it could soon be as pricey as beef as production costs soar.

Steve Murrells, chief executive of the Co-op, said that feed costs had become a huge challenge for the poultry industry. “Chicken could become as expensive as beef. Chicken, which was incredibly cheap and great value for money, is rising quicker than any other protein.”

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Unprecedented inflation ahead as Ukraine war adds to costs, says Unilever

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Rise in energy and ingredient costs suggests consumers will have to pay more for well-known brands

The consumer goods firm Unilever has said “unprecedented cost inflation” lies ahead as Russia’s war on Ukraine has added to a surge in energy and ingredient costs, and said that shoppers will pay even more for well-known brands in the coming months.

The company, which makes goods ranging from Dove soap to Magnum ice-cream and Marmite, said on Thursday it expected its costs to rise by €2.7bn (£2.3bn) in the second half of 2022, after an already steep increase on the €2.1bn expected for the first half.

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Shelf shock: soaring supermarket prices shoppers find hard to swallow

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From dog food to coffee, readers are reporting some basic goods’ prices are rising by far more than inflation

Inflation is rampant, and supermarket prices are no exception. Shoppers are returning to stores to find old favourites have leapt in price from one week to the next. The cost of consumer goods is spiralling at such a rate that retail analysts have coined a new term, shelf shock.

Nestlé, the owner of KitKat, Häagen-Dazs and Felix cat food, became the latest consumer goods group to warn of more pain to come on Thursday, saying it had raised prices by 5.2% in the first three months of this year and that rising production costs would force another increase soon.

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UK consumer confidence even lower than in 2008 financial crisis

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Slowdown in retail sector feared as public gripped by pessimism about the economy as well as personal finances

Fears that Britain is heading for a marked slowdown in consumer spending have intensified as it emerged that the public is gloomier about the economy than when banks were on the brink of collapse during the financial crisis of 2008.

A combination of rocketing energy prices, higher taxes and a surge in the annual inflation rate to its highest level in three decades meant confidence was in freefall, according to the latest monthly snapshot of sentiment.

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Up, up and away: will rising prices blow Democrats’ midterms hopes off course?

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Inflation hit 8.5% in March as a mix of post-pandemic demand, price gouging and the Ukraine war dragged down Biden’s ratings

In the days leading up to the release of the US labor department’s latest inflation report, the White House tried to deflate expectations. White House officials said they expected the March inflation rate to be “extraordinarily elevated” because of rising gas prices, driven largely by war in Ukraine.

Unfortunately for Joe Biden and his fellow Democrats, they were proven right. The inflation report, released on Tuesday, showed US prices increased by 8.5% between March 2021 and March 2022 – the highest level of US inflation since 1981.

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Democrats fear soaring inflation could bring midterm election losses – live

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Democrats warn president to fix inflation or say goodbye to control of Congress as wholesale prices surge record 11.2% in March

The federal mask mandate for travelers will be extended by a further two weeks as the government assesses the recent uptick in Covid-19 cases across the US, multiple news sources are reporting.

An official announcement from the centers for disease control and prevention (CDC) is expected shortly, according to the Associated Press and others.

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Jump in UK wages fails to keep pace with cost of living

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Pressure for more support for households and businesses after consumer prices rise 6.2%

Business live updates: jobless rate drops and wage squeeze continues

Britain’s cost of living crisis moved into its fourth consecutive month in February despite a jump in wages and a fall in unemployment to just 3.8%, its lowest level since 1974.

The Office for National Statistics said average earnings growth of 5.4%, including bonuses, failed to keep pace with a 6.2% rise in the consumer prices index in February, while for those who missed out on a bonus the situation was even worse after average wages increased by only 4%.

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High energy-using industries fear lack of support from UK ministers

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Firms say they need the kind of help that EU competitors get as gas and electricity prices soar

Britain’s strategic heavy industries have warned they risk being left high and dry by a lack of support in the government’s upcoming energy strategy, warning that failure to follow European countries’ measures to reduce gas and electricity costs will put UK businesses at risk.

The government is expected to outline long-awaited proposals this week for a once-in-a-generation drive to invest in nuclear power and possibly more onshore wind and solar power, as well as approving continued North Sea oil and gas exploration.

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Rishi Sunak tackled over failure to help poorest families

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Experts say absolute poverty could hit a fifth of UK population following chancellor’s mini-budget

Rishi Sunak has sought to defend his mini-budget against accusations he failed to shield Britain’s poorest families from the worst hit to living standards in six decades, as economists warned 1.3 million people will fall into absolute poverty next year.

Amid heavy criticism of Wednesday’s spring statement from opposition leaders and his own back benches, experts from the Institute for Fiscal Studies (IFS) and Resolution Foundation thinktanks said the chancellor could have done more to help those most at need.

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Upshot of Rishi Sunak’s spring statement? A bleak decade ahead

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Analysis: Britain has ceased to be a country where workers can expect to get better off year after year

Much has been written about the year of economic misery ahead. Rishi Sunak’s attempts to mitigate the impact of the squeeze on living standards have been pored over and – generally – found wanting. The postmortem examinations carried out on the chancellor’s spring statement were unflattering.

There was plenty for the thinktanks that specialise in analysing tax, spending and living standards – the Resolution Foundation and the Institute for Fiscal Studies – to mull over.

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Raise benefits and pensions to help lower earners, thinktank tells Rishi Sunak

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Resolution Foundation says pegging benefits to inflation will target help to needy better than scrapping NI rise

Rishi Sunak should consider raising benefits and pensions to keep pace with inflation, research has suggested, as the chancellor faced increasing pressure to tackle the cost-of-living squeeze in this week’s spring budgetary statement.

Increasing benefits by an extra five percentage points, by 8.1% rather than the 3.1% currently planned, would give four times as much help for low-to-middle income households for every pound spent as scrapping the planned national insurance rise, the Resolution Foundation said.

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US Federal Reserve raises interest rates for first time since 2018

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Fed raises rates by a quarter percentage point from near zero as central bank struggles with inflation, the war in Ukraine and Covid

The Federal Reserve has raised interest rates for the first time since 2018, as the central bank struggles with soaring US inflation, the impact of the war in Ukraine and the coronavirus crisis.

The Fed raised rates by a quarter percentage point from near zero, in what is expected to be the first in a series of raises in the coming months.

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