On average, life in the United Kingdom was about 9 percent more expensive in April than a year earlier. British inflation thus reached its highest level in more than 40 years.
The skyrocketing inflation puts further pressure on the government and the British central bank to take action. The British statistics agency reported that consumer prices had not risen this fast since 1982.
The rise in inflation is also twice as high as the rise in wages. As a result, the purchasing power of the British, on average, continues to erode. The situation is expected to get even worse. The Bank of England (BoE) expects inflation to reach double digits by October, mainly because of more expensive energy contracts that many Britons will have to deal with.
The cost of living crisis has sparked a sharp political debate on how to deal with a series of shocks hitting the UK. Prime Minister Boris Johnson’s Conservative government targets people at work, while the Labor opposition calls for an emergency budget to help retirees and those on benefits. Both sides and some economists blame BoE Governor Andrew Bailey for describing inflation as “temporary” for too long.
One of Bailey’s predecessors, Mervyn King, who led the central bank through the crisis in 2008, previously said the BoE’s package of measures last year was a mistake. “The mistake is that central banks worldwide are confident that inflation will simply return to target,” King said in an interview on LBC on Tuesday. “Most people will be worse off because of higher food and energy prices.”
