Last month, commodity prices in the United Kingdom spiked at their steepest rate in 30 years, driven by rising expenses for household electricity and automobile fuels – the latest bleak numbers as global inflation keeps rising.
The Office for National Statistics said Wednesday that inflation in the United Kingdom increased to 7% in the year 2022, the highest annual rate since March 1992. As spiralling energy costs, rising food prices, and tax increases surpass higher salaries, the UK is facing the worst loss in living standards since the mid-1950s, as per economists. People all over the world are feeling the pinch of inflation as demand quickly recovers from the COVID-19 pandemic, and Russia’s war in Ukraine drives up energy prices and compresses supply chains.
Even consumer prices in the United States rose 8.5 percent from a year ago last month, the fastest rate in more than 40 years, according to the Labor Department. Inflation in the 19 European countries that use the euro rose to 7.5 percent last month, marking the fifth month in a row that it has achieved a new high. According to the government’s independent budget adviser, disposable household earnings in the United Kingdom are likely to fall by 2.2 percent this year, adjusted for inflation. Household natural gas prices increased 28.3% year over year, while electricity costs increased 19.2%, as the global economy recovered from the COVID-19 epidemic resulting in increasing global energy demand. Prices will continue to rise after the UK’s energy regulator approved a 54 percent increase in gas and electricity bills that came into effect from April for millions of households. Transportation costs are also growing, according to the Office for National Statistics, with the cost of gasoline and diesel fuel rising by an average of 30.7 percent over the last year, the largest increase since records began in January 1989.
Countries are hiking interest rates to ease the burden of rising food, fuel, and other prices. Since December, the Bank of England has raised its key interest rate three times, and the Federal Reserve of the United States boosted its benchmark short-term rate last month and is anticipated to keep rising it, possibly dramatically. Meanwhile, the European Central Bank has accelerated its exit from economic stimulus efforts to control inflation, but has refrained from taking more harsh measures. It is scheduled to meet again on Thursday.