UK inflation data for April was released, showing consumer prices soaring to the highest annual level not seen in the country since 1982. Food prices rose nearly 7% in the 12 months to April, according to the ONS.
The skyrocketing cost of living is putting British households in a difficult position as the cost of basic necessities such as food and energy soar. In light of the growing discontent of the population, the United Kingdom Treasury is forced to provide financial assistance.
The pound reacted to the release of negative economic news by falling: the GBP/USD pair fell by 0.6% by the time the material was prepared, to 1.2420.
According to data released by the Office for National Statistics, consumer price inflation reached 9% in April. This figure surpassed even the high of the early 1990s recession, when the country experienced sky-high interest rates and widespread mortgage defaults.
The current inflation in the UK is the highest among the five largest economies in Europe. Moreover, it is hardly possible to find higher rates of price growth among the G7 countries. Even though Canada and Japan have not yet released their data for April, it is unlikely that their figures can even slightly match the fall in living standards in the UK.
British Finance Minister Rishi Sunak told the media about the current situation in the country that the government is not yet able to fully protect its population from global problems, but is preparing to provide considerable support to it. Sunak resists public pressure, demands not to rush and see how much the electricity tariffs will rise in the fall. Only after that he intends to make a decision on substantial support to the population.
The massive rise in prices in the UK is mainly driven by the massive increase in electricity bills last month. Given the long-term consequences of the Russian military operation on the territory of Ukraine, there is no doubt that in October these accounts will increase even more. Rising prices in restaurants and cafes also contributed to a jump in inflation last month.
Brits are facing the biggest drop in the cost of living since the 1950s, when records began to be kept. Consumer confidence is at an all-time low today. Participants in the anti-poverty campaign urged the government not to hesitate, but to start acting, as it is already necessary to help poor people who find themselves in a hopeless situation to cope with financial difficulties that have washed over them. It is important to significantly increase the cost of social benefits, which in the end should at least somewhat correspond to the current inflation.
According to a poll by the sociological company Ipsos, 2 out of 3 people in the UK turned off the heating in advance; almost half use their own transport less; just over a quarter said they had to cut back on their meals. A separate YouGov poll showed that 72% of respondents believe that Prime Minister Boris Johnson's government is not handling the economic crisis well. By the way, these data are almost twice as high as those that were more than a year ago.
The Bank of England expects inflation to exceed 10% at the end of this year.
