The UK retail inflation rate rose even faster, reaching 9% per annum in March, the highest since 1991. Although the RPI is no longer a national statistic (the ONS says it is not a good measure of inflation), it is still used in many commercial contracts, in wage bargaining, and to set interest rate bonds on index-linked government bonds. Inflation in the UK continues to accelerate. CPI inflation up to 7 percent. RPI increased by 9 percent compared to a year ago. Factory gate price inflation of up to 11.9 percent and manufacturing input prices increased by a whopping 19.2 percent compared to a year ago! – Andrew Sentance (@asentance) April 13, 2022 32 minutes before 08:48
TUC: The UK needs an emergency budget
The TUC is calling for an emergency budget to help troubled households, including more help with energy bills. TUC General Secretary Frances O’Grady says: “The chancellor has done almost nothing to help the families as prices rise. And with wage restraint in the public sector and cuts in universal credit, it has exacerbated the crisis. “Families need help now. “Whoever is chancellor tomorrow will have to go to parliament with an extraordinary budget to help with rising energy bills and raise salaries.” 34 minutes ago 08:46 Chancellor of the Exchequer Rishi Sunak warned that the Russia-Ukraine war could exacerbate inflationary pressures: “We are seeing rising costs caused by global pressures on our supply chains and energy markets, which could be further exacerbated by Russian aggression in Ukraine. “I know this is a worrying time for many families and that is why we are taking action to lighten the burden by providing περίπου 22 billion in support this fiscal year, including the most vulnerable through the Family Support Fund. “We also help as many people as possible to work – the best way for families to be financially secure in the long run.” However, Sunak continues to be heavily criticized for not providing more help in last month’s Spring Declaration, with households facing the highest living costs recorded. This lack of support for low-income families will push another 1.3 million people into absolute poverty next year, the Resolution Foundation warned last month. Universal credit and government pensions rose only 3.1% this month (up from last September), even though inflation was already double that level. Katie Schmuecker, deputy director of policy and partnerships at the Joseph Rowntree Foundation, says this will mean “deeper difficulties” for struggling families. Inflation reached 7% in March. This week’s benefits increased by 3.1% This gap is the biggest erosion of benefits in the last 50 years and comes after a decade of cuts and freezes. The result: deeper difficulty.1 / 2pic.twitter.com/CSD3Q2nNbC – Katie Schmuecker (@KatieSchmuecker) April 13, 2022 34 meters ago 08:46 Thirty years since the last print of 7% inflation in the UK – but the composition is very different this time around with the cost of (imported) goods now leading to nominal inflation – whereas thirty years ago it was based on wages in services sector. pic.twitter.com/sqkJpGv9hg – Simon French (@shjfrench) 13 April 2022 42 m. Before 08:38 Panmure Gordon economist Simon French warns that inflation could peak at 10% this year: Nothing in the current version of the UK CPI for March (appearance + 7.0% per year) changes our view that the CPI will peak at around 10% this year. Signs of widening inflationary pressures between key components and a large jump in input costs. All in view of the most acute energy compression of April. pic.twitter.com/0FNrNadnsC – Simon French (@shjfrench) April 13, 2022 50 million before 08:30 UK inflation 51 million before 08:29 Restaurant and hotel prices rose 2% between February and March 2022, the biggest monthly change since ONS data began in 1988. This was mainly due to the rising cost of alcoholic beverages served in restaurants, cafes and brothels, as well as accommodation services. Kitty Ussher, chief economist at the Institute of Managers, said: “It seems that when people resumed their social life as the restrictions expired in March, the places they visited were able to pass on their own higher costs to their returning customers.” Kate Nicholls, CEO of UKHospitality, warns that hosting companies are already seeing double-digit cost increases. Inflation jumps to a 30-year high – above the forecast increase and is largely due to price increases in restaurants and hotels and fuel and remember it was for March, so before the VAT increase. Inflation in hosting cost prices has already reached double digits pic.twitter.com/MuOtKmWExl – Kate Nicholls (@UKHospKate) April 13, 2022 The end of the temporary VAT cut, from 20% to 12.5%, in pubs, cafes, bars and restaurants this month will also boost prices. 1 hour before 08:02 The following is an analysis of the factors that led to inflation in the UK at a high of 30 years 7%:
Food and non-alcoholic beverages: 5.9% Alcoholic beverages and tobacco: 4.8% Clothes and shoes: 9.8% Housing, water, electricity, gas and other fuels: 7.7% Furniture, home equipment and maintenance: 10.3% Health: 2.5% Transport: 13.4% Contact: 0.7% Leisure and culture: 4.9% Education: 4.5% Restaurants and Hotels: 6.9% Miscellaneous goods and services: 1.9%
2 hours ago 07:47 UK factories have also been hit by rising raw material costs and have continued to raise their own prices. The cost of inputs paid by producers increased by 19.2% year-on-year by March, according to the ONS, the highest rate since registrations began in January 1997. In March alone, input inflation was 5.2%, up from 1.8% in February, which is also a record increase. Metal products and crude oil were the main factors, due to rising commodity prices since the start of the war in Ukraine. The ONS says: Crude oil and gas prices continue to rise, in part due to global geopolitical tensions, including the conflict in Ukraine and trade restrictions with Russia. These increases are transferred to the prices of factory gates for heavy industry, such as the manufacture of metal products, reflecting the importance of oil and fuel in the cost of their inputs. Producers increased production prices by 11.9% compared to a year ago (the highest rate since September 2008), which will lead to higher prices for consumers. Updated at 07:50 BST 2 hours ago 07:34 These graphs underline the rise in prices: UK inflation until March 2022 Photo: ONSUK inflation Photo: ONS2h before 07:30 Energy costs have also risen in the last year. Gas prices were 28.3% higher in March than last year, while electricity was 19.2% higher. This, however, does not include the latest price increase, which raised average bills by 54% for some 22 million households this month. Kerosene prices for home heating increased by 44.0% between February and March 2022. Heating oil is not covered by the Ofgem price cap, so kerosene-based households (often in rural areas) saw their costs increase. last months. Updated on 08.08 BST 2 hours ago 07:23 Rising fuel prices hit record highs, leading to rising inflation in March, according to the National Statistics Office. The average price of gasoline was 160.2 pence per liter in March 2022, compared to 123.7 pence per liter a year earlier. Diesel also hit a record high of 170.5 ppm in March after Russia invaded Ukraine and pushed up oil prices. The ONS says: Average gasoline prices rose 12.6 pence per liter between February and March 2022, the largest monthly increase since 1990 (since 1990). This compares with an increase of 3.5 pence per liter between the same months of 2021. Similarly, diesel prices rose by 18.8 pence per liter this year, up from 3.5 pence per liter a year ago. Updated at 07.26 BST 2 hours before 07:12 UK inflation rates Photo: ONS 2 hours before 07:10 ONS chief economist Grant Fitzner says price hikes on a “broad basis” pushed inflation to 7% last month. 2 hours ago 07:07
Introduction: Inflation in the UK reached 7%
Good morning and welcome to the rolling coverage of business, the global economy and the financial markets. Inflation in the UK has accelerated to a new 30-year high, deepening the cost-of-living crisis. Consumer prices rose 7% year-on-year to 6.2% in February, according to newly released data, as living standards continue to squeeze. This is the highest CPI inflation rate since March 1992 and higher than expected, as energy, fuel and food continue to rise sharply. On a monthly basis, the CPI increased by 1.1% in March. This rise in inflation means that workers are making real wage cuts. Total wages (including bonuses) increased by 5.4% per year in the quarter to February, while regular wages increased by 4%. Inflation is expected to rise again in April, possibly above 8%, due to the 54% increase in the energy ceiling. This will intensify the pressure on households, with economists predicting that this will be the worst parliament ever recorded to raise living standards. Inflation also hurts business confidence. The climate between financial services companies has fallen at the fastest pace since September 2019, according to the latest CBI / PwC Financial Services Survey published this morning. Inflation is also a global problem at the moment – in America it climbed to 8.5% last month, a 40-year high, as gasoline and food prices soared. And overnight, it pushed the New Zealand central bank to raise interest rates by half a percentage point, its biggest rise in 22 years, as inflation there reached 5.9%.
THE AGENDA
7 a.m. BST: Consumer Inflation Report in the UK for March 7 a.m. BST: UK Producer Price Inflation Report for March 9 a.m. BST: IEA publishes monthly oil report 9.30 a.m. BST: UK house price index for February 3 p.m. BST: Bank of Canada sets interest rates
Updated at 07.15 BST
