As The People Of The UK Struggle To Make Ends Meet In The Midst Of A Rising Cost Of Living Problem, The Country’s Inflation Rate Has Risen To Its Highest Level In Forty Years

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Last Updated on October 19, 2022 by Bitfinsider

According to estimates that were released on Wednesday by the Office for National Statistics, the consumer price index increased by 10.1% in September. This result was just slightly higher than the projection that was reached by a consensus of analysts polled by Reuters.

According to Reuters’ projections, sales rose by 10% in September. The figure for September is the same as the all-time high for inflation in the UK, which was achieved in July.

As the country’s cost-of-living issue continues to hit individuals and companies hard in advance of a harsh winter, the rate increased over the course of the year leading up to September 2022. On the strength of a reduction in fuel prices, inflation unexpectedly fell to 9.9% in August, down from 10.1% in July. This decline was mostly attributable to falling oil prices.

According to the ONS, the three main causes that contributed the most to inflation were rising costs of food, transportation, and energy. In comparison to the previous year, the cost of transportation increased by 10.9%, the cost of food increased by 14.6%, and the cost of furniture and other household products increased by 10.8%.

As a result of the news, the value of the pound declined in comparison to the dollar, and it is now trading at $1.1289, down from $1.1330.

The inflation report was released on the same day that the Bank of England announced intentions to begin selling off some of its government bonds, also known as gilts, beginning on November 1.

Along with “delivering wider economic stability and fostering long-term growth that will help everyone,” British Finance Minister Jeremy Hunt stated in a statement that “support for the most vulnerable” will be a priority while the United Kingdom weathers high inflation rates.

The United Kingdom is currently enduring a period of economic uncertainty, and the inflation rate for September illustrates the severity of the inflation crisis that the country is currently facing.

On Monday, the new British Finance Minister Jeremy Hunt reversed the majority of the tax cuts that had been introduced by his predecessor, Kwasi Kwarteng, on September 23. At the same time, the Prime Minister of the United Kingdom, Liz Truss, apologized for “mistakes” that had caused significant market volatility.

The length of time that Truss will continue to serve as secretary of state is currently a topic of speculation.

According to McKinsey & Company’s research, the general public in the United Kingdom has a “pessimistic” outlook regarding the cost of food. Eighty-four percent of respondents stated that they spent the same amount or more on groceries over the course of the most recent three months.

“The degree of inflation is already leading consumers to think differently about Christmas,” Samantha Phillips, a partner at McKinsey, said in a research statement. “58% planning to cut back on Christmas spending and 8% not planning to do any shopping at all,” she said.

According to Marcus Brookes, chief investment officer at Quilter Investors, the prediction made by the ONS will not inspire the Bank of England to review how it approaches interest rates. This is according to the prognosis made by the ONS.

′′The Bank of England may be satisfied by the moves made in Westminster for the time being, but in the coming weeks, we will see what it really makes of the government’s fiscal policy as it makes its next move at its November Monetary Policy Committee meeting, ′′ said Brookes. ′′The Bank of England may be satisfied by the moves made in Westminster for the time being. ′′

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