LONDON (Parliament Politics Magazine) – As the prices of food, fuel and energy continue to increase at their quickest rate in 40 years, inflation in the UK rises upto 9.1% over the course of a year ending in May from 9% in April according to the National Statistics (ONS).
The current increase was largely attributed to rising food prices, particularly those for bread, cereal, and meat, the ONS reported.
Unions and employees have been requesting pay increases as a result of cost of living issues.
However, the government has cautioned against firms offering significant pay raises out of concern about an “inflationary spiral” in the 1970s, in which prices rose even as wages increased.
The Bank of England has issued a warning that inflation will hit 11 percent this year as it is currently at its highest step since March of 1982, when it also stood at 9.1 percent.
The rate at which prices rise is known as inflation. For instance, juice inflation is 5 percent if the price of a carton of juice which costs £1 increases by 5p compared to a year earlier.
Over 4,000 individuals participated in a survey for the BBC, and 82 percent of them agreed that wages should rise to keep up with rising prices for goods and services.
Energy costs struck households with an unprecedented rise of £700 per year in April, and fuel price increases in June mean that the average family car now costs over £100 with petrol.
Rail employees began a series of strikes on Tuesday in an argument over pay, jobs, and conditions, seriously disrupting the nation’s railways.
A total of 40,000 members of the Rail, Maritime and Transport (RMT) union who work for Network Rail and 13 train operators went on strike when union leaders demanded a pay increase of 7% but employers only agreed to a 3% increase.
In response to “talks of public sector wage restraint,” Jon Richards, assistant general secretary of Unison, claimed that governments were “living on another planet.”
According to him, staff members in the under-pressure health, care, school, and council sectors desperately need to be given a salary raise that meets skyrocketing prices.
They had to stop making the problem worse by fueling salary demands that would only see inflation stay higher for longer and that only would impact the poorest the worst, Dominic Raab said on the BBC’s Today show.
According to the ONS, increased food and non-alcoholic beverage costs contributed to inflation in May.
Supplies of wheat and maize, which are used for making bread and cereals, from two of the major exporters in the world have been severely constrained by Russia’s war in Ukraine.
Ukraine is a significant producer of sunflower oil, hence the price of substitutes has also increased.
The average yearly grocery cost in the UK is expected to increase by £380 this year, according to market reach firm Kantar.
Consumers are placing less in their baskets and moving to budget choices, according to supermarket Asda, which told the BBC that some customers are establishing £30 restrictions at checkouts and gas stations.
According to Grant Fitzner, chief economist at the ONS, “widespread food price rises” were the main reason why prices of goods leaving factories increased at their quickest rate in 45 years in May.
The price of raw materials “leapt at their fastest rate on record,” Mr. Fitzner continued.
However, he said that the sharp increases in food prices and the record-high fuel price in May had been tamed by lower price increases for clothing this year compared to this time last year and a decline in the price of computer games.
Chancellor Rishi Sunak stated in response to the most recent inflation rate that the government was using all the measures available to bring inflation down and combat rising costs.
They had taken focused action to assist families, giving £1,200 to the eight million most vulnerable homes because they were aware that people were concerned about the growing cost of living, he continued.
However, Rachel Reeves, the shadow chancellor for Labour, claimed that the nation required more than bandages to get them back on course — they needed a stronger, more stable economy.
The low salary spiral that many people in Britain were facing was not new, despite the fact that rapid inflation was putting family finances in danger. Due to Tory mishandling of their economy over the past ten years, living standards and real wages had failed to see growth.
Raising interest rates is one strategy for attempting to slow the rate of price growth. Due to the rising cost of borrowing, more people are choosing to save money instead of spending it.
The Bank of England recently raised UK interest rates from 1 percent to 1.25 percent in an effort to slow the pace of rising prices.
The increase, which was the fifth in a row, brought rates to their highest point in 13 years. However, interest rates were 13 percent when inflation last reached 9.1 percent in March 1982, according to Susannah Streeter, a senior investing and markets analyst at Hargreaves Lansdown.