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Cost-of-living crisis in UK: Soaring prices cause ‘acute distress’ to Britons, minister says

Thursday, 26 May 2022 3:31 PM [ Last Update: Thursday, 26 May 2022 3:31 PM ]

UK Chancellor of the Exchequer Rishi Sunak attends a cabinet meeting at 10 Downing Street in London on May 24, 2022. (Photo by AFP)

Soaring inflation across the UK has caused “acute distress” to Britons, Finance Minister Rishi Sunak has said, stressing that the Bank of England must take “decisive action” to get prices back under control.

Addressing the House of Commons on Thursday, Sunak was at pains to say that “the high inflation we are experiencing now is causing acute distress for people in this country. I know they are worried, I know people are struggling.”

“We need to make sure that for those for whom the struggle is too hard, and for whom the risks are too great, they are supported,” he added, announcing a 25 percent windfall tax on oil and gas producers’ profits, despite his previous stance that the one-off levy would ultimately deter investment.

British consumer price inflation hit a 40-year record number of 9 percent in April, with the Bank of England (BoE) estimating that it will reach double digits by the end of the year when regulated energy prices are set to rise by a further 40 percent.

The Chancellor of the Exchequer admitted that it will take time to curb the inflation, adding that surging energy and food prices are not the only contributing factors to the inflation.

Sunak said the BoE needs to be quick and persistent about his policy toward the interest rates in order to get inflation back to its 2 percent target.

“I know the Governor and his team will take decisive action to get inflation back on target and ensure inflation expectations remain firmly anchored,” Sunak said.

Financial markets expect the BoE to raise interest rates to at least 2 percent by the end of the year.

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