For people who think that UK is still a SUper POwer
Britain's nightmare economy of the 1970s may be making a comeback
Talk of stagflation has been brewing for months. Now that toxic combination of stagnant economic growth and high inflation appears to have arrived
in the United Kingdom.
UK consumer price inflation surged to 5.1% in November, its highest level in more than a decade, according to the Office for National Statistics. Prices are outstripping wage hikes and presenting a dramatic challenge to the Bank of England as it grapples with a
stalling economy and a new surge of
coronavirus infections.
November's CPI reading was much stronger than the 4.7% economists had expected, and the highest since September 2011.
Record
gasoline prices were a major contributor to the sharp rise in inflation. But retail prices of a broad range of goods also surged, including clothing, food, used cars, alcohol and tobacco, as well as books, games and toys.
Cost pressures show no sign of easing — prices of good leaving UK factories jumped 9.1% in November, the highest rate of producer inflation in more than 13 years. And the worker shortage got even worse last month with vacancies hitting a new all-time high of nearly 1.2 million.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said that inflation should remain near November's rate over the next four months, before soaring to 6% in April and then falling sharply.