UK experiencing highest inflation rate in a decade amid pandemic

The coronavirus pandemic has been blamed for disrupting supply chains and affecting energy prices worldwide. But in the case of the UK, with the post Brexit challenges it faces, there could be a long road ahead before recovery, especially now that Omicron is threatening its fragile recovery.

Inflation in the UK has risen to its highest level in 10 years. The cost of living has surged by 5.1% in the 12 months to November, up from 4.2% the month before.

This was the steepest increase for a decade and more than doubles the central bank's target. Increases in the cost of fuel, energy, clothing and secondhand cars were indicative of the rise in inflation.

UK inflation at a 10-year high

From the US, all the way to China, the reach of inflation is spreading around the world. Its latest victim is the UK, which is experiencing record inflation, the highest in 10 years.

Economists had expected an inflation rate of 4.7% for the month of November and the Bank of England had projected that inflation would hit 5% in the spring of 2022 before moderating towards the 2% target in late 2023.

We haven't seen inflation at this level for many decades. The highest level I can remember was back in the late 70s when it reached 25%.

So 5% is still very high, but nothing near that level. But it's still double the level and the Bank of England expected to have, just over to about two, two and a half percent.

And so it's going to be very difficult to try and adjust to it. Now the question is, of course, it is going to be embedded in flesh and carry on, as we saw in 1970s, or was it just rolled off after 12 months because of individual price increases?

Justin Urquhart Stewart, Regionally

UK inflation spikes to decade-high on eve of BoE rate call

British inflation has rocketed to its highest level for more than 10 years on broad-based price gains, data showed on Wednesday.

It is believed that global supply chain problems, staff shortages, and the rapid demand for oil and gas have all driven up prices and, as a result, the cost of living. The end of COVID-19 financial support schemes and Brexit also played a part.

In November petrol prices jumped to the highest ever recorded, while the cost of used cars jumped due to the shortage of new vehicles across the country.

The extent of UK fuel poverty has further increased due to the increase in energy costs, putting further strain on the average UK family.

UK new car sales slump to lowest October level since 1991

British new car registrations fell to their lowest October level since 1991 after a 25% year-on-year drop as a lack of semi-conductor chips continued to hit the sector, according to industry figures released on Thursday.

These changes take a long time to work their way through. Most recently, we have, for instance, a shortage of lorry drivers, and only now are we beginning to see our way through the other side of that.

So it's taken three or four months to work its way through. Other issues, supply chain, will take much longer; as often businesses will try and shorten their supply routes and de risk their supply chains. And that means more localization, local product production and maybe less trade coming out of, say, the Far East and other areas like that.

So global trade was first designed in such a way ... not actually very efficient, very taught. Unfortunately, when that elastic band breaks, it's very difficult to replace quickly.

Justin Urquhart Stewart, Regionally

UK faces slow growth, high inflation after pandemic and Brexit: Think tank

Britons will face stagnation and sticky inflation over the coming years because of persistent supply-chain bottlenecks and headwinds from Brexit, a think tank warned on Tuesday.

Unions call for action

The rising inflation rate has sparked an outcry from Britain's Unite trade union. It says many workers face an effective pay cut with the prospect of below inflation annual wage increases.

The Unite Union has urged companies to grant pay hikes that preserve the purchasing power of worker salaries.

Well, what we see obviously is all prices rising particularly gas prices rising, but, unfortunately, the British public, they got a nasty shock coming in the spring, when the government imposed cap on oil and gas prices is taken off.

And a lot of people will see that price of gas nearly double in value, which is going to be very painful for them indeed. So this is working its way through the system, we are going to see higher wage rises going through this particular hit people at the weaker end of society those who are low paid.

Well, if nothing else, it means they are going to get paid more, but unfortunately, not in real terms because even if you get the pay rise which has been suggested for many, when you have got inflation at over 5% you're still losing money.

Justin Urquhart Stewart, Regionally

Most UK manufacturers raising prices since at least 2000: Survey

The number of British manufacturers raising prices has hit its highest in at least two decades, according to a survey published on Monday as the Bank of England considers whether to head off inflation pressure with an interest rate hike this week.

Current estimates suggest that the cost of living for the typical UK family will jump by £1700 pounds per annum in the year 2022.

The opposition Labour Party claimed the government is not doing nearly enough to tackle the problem, especially as further inflationary pressure from rising energy costs is coming down the line.

UK's Kwarteng: Price cap will remain this winter amid pressure from energy firms

British business secretary Kwasi Kwarteng says the price cap will remain this winter despite calls by firms for a price hike to prevent more collapses as wholesale gas prices soar.

The latest COVID-19 variant, Omicron, which emerged last month forced Britain to reimpose Coronavirus restrictions, which were passed by Parliament on Tuesday.

The British economy was already struggling prior to the arrival of Omicron, growing by 0.1% in October, down from 0.6% in September.

UK factories struggle to meet record demand as supply issues continue

Factories in the United Kingdom are having a hard time satisfying the record demand for their goods due to severe supply constraints.

The International Monetary Fund warned on Tuesday that new COVID-19 variants pose downside risks to the outlook for Britain, urging the government to consider new emergency stimulus measures in the event of fresh lockdowns.

The IMF predicted inflation would reach about 5.5% early next year, which is the highest in 30 years, and warned the BOE not to succumb to inaction bias.

Panic buying of fuel worsens UK fuel crisis

With winter just around the corner many Britons fear that they will not be able pay the high energy bills. How many of them will die this year?

Economists have warned that the supply chain disruptions will continue to disrupt economic activity leading to sharp price increases, at least for the year 2022.

This phenomenon is not unique to the UK. The US and many other parts of the world are also suffering from inflation, from soaring food prices and untenable energy costs, where the weak get weaker and the strong go through the motions of caring when it suits them.

UK winter crisis looms

These are worrying times for British families already finding themselves counting the pennies.

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