17 August 2022
If you are covering the latest UK inflation statistics, please see the following comment from Richard Carter, head of fixed interest research at Quilter Cheviot:
“The pressure on consumers has risen once again with yet another increase in inflation. The UK consumer prices index rose sharply last month coming in at 10.1%, up from 9.4% in June as high energy and food costs continue to mount.
“With utility bills set to increase again in the autumn, with predictions suggesting the energy price cap will rise to more than £3,000 in October, there is still some way to go before we reach the peak in UK inflation. In its latest announcement, the Bank of England said it now expects inflation to peak at just over 13% in Q4 2022, a significant jump on its previous forecast of 11%. As such, the Bank is likely to respond at its next monetary policy meeting with yet another 50 basis points interest rate rise in an attempt to combat it.
“As it stands the cost-of-living crisis is not going to be a short-lived affair, and the road ahead for consumers remains incredibly challenging given wage growth is lagging well behind the rise in inflation. Yesterday’s data showed employees saw their pay, excluding bonuses, rise by 4.7% from April to June, though even with this rise they have experienced a real terms cut of 3%. Given these figures are likely already dated, we can expect things to get worse before they get better. As such, there will no doubt be a lot of pressure on the next Prime Minister to help soften the blow and the Bank of England will continue to have a very difficult job on its hands.”
