Inflation will hit Britain more than any other major economy, Bank of England warns


The head of the UK’s central bank warned that during the current energy crisis, rising inflation would hurt more than any other major economy.

The Bank of England Governor Andrew Bailey said the impact on the UK economy as a result of energy price shocks is likely to be faster and more severe than in other countries.

“Unfortunately, UK inflation will rise further later this year, as energy price caps are the product of how energy prices have been observed over the past few months,” Bailey said in Europe. I told the Central Bank. Banking (ECB) meeting held in Sintra, Portugal on June 29th.

Epoch Times Photo
The Bank of England Governor Andrew Bailey will submit evidence to the Treasury Select Committee of the House of Commons in London on May 16, 2022. (PA media)

“I think the UK economy is probably much faster and a little weaker than the others.”

The governor said in the latest inflation data that the cause of high inflation is shifting from the high prices of goods that were lacking after COVID-19 to the goods and services affected by Russia’s invasion of Ukraine. Said I saw it.

To deal with inflation, central banks have raised interest rates five times since December.

Decrease in household income

The latest figures from the National Bureau of Statistics (ONS) show that households are not keeping up with inflation.

According to ONS, real household disposable income fell 0.2% from January to March, with 1.5% income growth surpassing 1.7% household inflation.

Households are now under pressure for the first year in a row, and rising prices mean a record decline in post-inflationary income for the fourth straight quarter.

Darren Morgan, Director of Economic Statistics at ONS, said: However, given inflation, income fell again for the fourth straight quarter. “

Rising business costs

As the cost of doing business continues to rise, the business community has urged the UK government to help companies survive the “worst case” of rising costs and labor recruitment issues.

Shevaun Haviland, Secretary of the British Chamber of Commerce (BCC), warned the minister not to impose further tax increases on businesses.

At the BCC’s annual meeting in London, she called for a long-term plan and immediate action to resolve the skill shortage as companies continue to struggle to hire staff.

“We need to reduce the bureaucratic formalism and cost burden currently imposed on UK companies to ensure smoother exports,” she said, stating that relations between the UK and the EU need to be improved. Added.

PA Media contributed to this report.

Alexander Chan