The Ukraine conflict has sent inflation soaring to its highest levels in decades around the world, wreaking havoc on the economy and forcing major central banks to raise interest rates. Inflation in the UK has accelerated to its highest level in 41 years due to higher energy, food and transport prices.
The UK consumer price index reached 11.1% in October, the highest level since 1981, the Office for National Statistics (ONS) said in a statement.
It was the highest in 40 years compared to 10.1% in September.
The Banque de France estimates inflation at around 6%.
Cross-channel domestic fuel prices surged further despite the UK government’s freeze on energy prices as the market faced renewed impacts from Russia’s invasion of Ukraine, a major producer.
The October figure was above market expectations of 10.7% and higher than the Bank of England’s forecast peak.
“Despite the energy price guarantee, headline inflation has reached its highest level in more than 40 years due to rising gas and electricity prices,” said ONS chief economist Grant Fitzner.
Gas prices have risen 130% and electricity prices have risen 66% over the past year, according to the ONS.
Food prices and transportation costs also pushed up inflation.
The runaway inflation comes despite UK energy aid, which seeks to limit annual energy bills to an average of £2,500 per year.
British Finance Minister Jeremy Hunt, speaking on the eve of the government’s budget announcement, blamed Russian President Vladimir Putin’s war in Ukraine on soaring prices and the impact of the coronavirus pandemic.
Germany gains confidence
German investor confidence showed a surprising rebound in November, a closely watched survey showed on Tuesday.
The ZEW Institute economic index rose 22.5 points to -36.7 points, the second straight rise after months of falling confidence.
Food prices in Spain hit a record high in October, according to official data, and the cost of living remained painfully high even as lower energy costs spurred lower inflation.
Food prices rose 15.4% year-on-year, the biggest increase since records began in January 1994, according to the National Institute of Statistics.
The EU has warned that the eurozone could plunge into recession this winter after the EU raised its inflation forecasts for 2022 and 2023 on the back of soaring energy prices.
http://www.unitedkingdomnews.net/news/273101467/france-europe-britain-reel-as-inflation-reaches-record-levels Inflation hits record levels, rocking France, Europe, UK