The UK is one of the most advanced nations and has strong economic health. The past few months have been traumatizing for global powers in terms of economic stability. Amongst many factors such as Ukraine- Russia war, increasing prices of fuel, and geopolitical turbulence across many nations all these events have contributed to such financial instability.
London is hard hit and is indeed in crisis as it announced an inflation rate of 10.1% which is the highest since 1982 (40 years). Forcing the authorities to take immediate action.
As the number went in double digits people are petrified as there is intensified pressure on them to manage their household expenses, spending has to be done judicially.
Food prices have risen unexpectedly, particularly commodities such as dairy, bakery products, meat, vegetables etc. The rise in the food products have the biggest contribution in the rise. The consumer price index jumped from 9.4% to 10.1%.
These figures have immense stress amongst people as it will add to cost-of-living for the citizens. The authorities have indicated that there is a high possibility that by October the rate will be 13% .
The governor Andrew Bailey has signaled that all should be ready to experience tougher times as interest rates will go up further. Even investors are pricing in another 50 basis -point hike in September.
“Rising inflation is really putting a squeeze on real wages, even with strong wage growth,” said Mike Bell, global market strategist at JP Morgan Asset Management. “And with the increase in energy bills coming in October, it’s only set to get worse.”
Looking at the current trends, economists are afraid and highly pessimistic about the UK’s economic-financial position. The BOE (bill of exchange) predicts that the economy will be under recession from the fourth quarter and will be in the same position till early 2024.
Also adding to the pressure is the increase in fuel prices, which will make the rate reach about 13% according to the World Bank.
Under these testing times, the government has to adopt policies that will help people to sustain these tough times. First and foremost agencies must reach out to those who are vulnerable and directly affected and then provide help to households across the land.
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