UK Inflation Hits New 40-Year High Of 9.1%, Food And Energy Price Surge
June 22, 2022
May 18, 2022
From April 1, the U.K. energy regulator increased the household energy price cap by 54% following a surge in wholesale energy prices, including a record rise in global gas prices. The regulator, Ofgem, has not ruled out further increases to the cap at its periodic reviews this year.
The British Chambers of Commerce warned following Wednesday’s announcement that the “eye-watering” inflation rate and cost-of-living crisis facing households is damaging firms’ ability to invest and operate at full capacity.
“The scale at which inflation is damaging key drivers of U.K. output, including consumer spending and business investment, is unprecedented and means there is a real chance the U.K. will be in recession by the third quarter of the year,” said Suren Thiru, head of economics at the BCC, in a note.
“While inflation may moderate a little over the summer, April’s inflationary surge is likely be surpassed in October as the expected energy price cap rise in the month lifts inflation above 10%.”
The BCC called on the British government to help consumers and businesses through the crisis by reversing its recent increase to National Insurance — a tax on income — and cutting VAT (value added tax) on business energy bills.
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