Official numbers released Wednesday showed that inflation in the United Kingdom hit a 40-year high of 9% in April, worsening the country’s cost-of-living crisis.
The 9.0% increase in the consumer price index is the largest since records began in 1989, surpassing the 8.4% increase in March 1992.
As price pressures and a food crisis converge in what Bank of England Governor Andrew Bailey recently described as an apocalyptic prospect for consumers, a fifth of Britons have resorted to skipping meals.
It will also put further pressure on the Bank of England to raise interest rates and deal with rising prices, even though many of the causes driving inflation are outside their control, as they recognize.
Following a rise in global energy prices, including a record rise in worldwide gas prices, the UK energy regulator boosted the household energy price cap by 54%. At this year’s periodic assessments, the regulator, Ofgem, has not ruled out additional rises to the quota.
The Bank of England has raised interest rates four times in a row, boosting borrowing costs from their historic pandemic-era lows.
The massive inflation figure released on Wednesday is just another hammer blow to people already concerned about rising living costs, with warnings that the worst is still to come.
The BCC urged the British government to reverse its recent hike in National Insurance to help consumers and companies weather the storm.
More minor increases are predicted in the following months, and the market expects the Central Bank of Russia to keep unwinding its emergency interest rate boost.
As its currency rebounds and economic data improve, Russia believes it has avoided a financial crisis, but strategists say the numbers hide some painful truths for Moscow.
Although the country’s inflation is high, there are indicators that it is reducing and will remain to do so, while the Russian ruble has risen from an all-time low in March to become the best-performing currency in the world this year.
Economic indicators are strengthening, and Russia has avoided failing on its foreign currency loans thus far.
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