Inflation in the UK remained steady at 3.8% in the year leading up to August, according to official statistics. This rate matches that of July, with a notable increase in food prices contributing to the overall inflation figure. Specifically, costs for cheese, fish, and vegetables saw significant rises, while some other expenses, such as airfares, increased at a slower pace.
This data was released as the Bank of England’s Monetary Policy Committee prepares to meet and discuss interest rates, with an announcement expected on Thursday. Although inflation is above the central bank’s target of 2%, a reduction in borrowing costs is not anticipated.
The Office for National Statistics highlighted that the UK’s inflation rate is significantly higher than that of major European economies. In August, France reported an inflation rate of 0.8%, while Germany recorded 2.1%.
Yael Selfin, chief economist at KPMG UK, noted that the UK has become an outlier in terms of inflation relative to other major economies in recent months. She pointed out that the rise in inflation since April has largely stemmed from domestic policy decisions, such as an increase in employers’ National Insurance Contributions. These higher costs have reportedly been passed on to consumers, contributing to elevated headline inflation figures.
The comparison with other countries raises questions about the underlying factors driving inflation in the UK, particularly in light of differing economic conditions in Europe.
Source: https://www.bbc.com/news/articles/cderznjj4r7o?at_medium=RSS&at_campaign=rss