In an economic surprise this week, the UK’s inflation rate increased unexpectedly, worrying households and businesses. New data published by the Office for National Statistics puts inflation at 6.2%, which is much higher than the Bank of England’s threshold of 2%. So what does this mean for Brits now?
What Caused The Shift?
There seems to be a consensus from experts on the factors responsible behind the surge. Supply chain instabilities, heightened energy expenditures, and a rise in food prices are among contributors to the shift. The biggest surprise, however, came from the spike in services costs, which has maintained relative stability for previous months.
The Effect On Lifestyle
For most people, the squeeze is already being experienced. From grocery errands to fuel, Britons seem to be suffering from inflation and its consequences. There has also been a rise in public transport fares and coupled with the ever normalising rents, the squeeze is likely to be felt in most areas.
What Is The Impact On The Interest Rates in Future Dates?
The Bank of England is considering increasing interest rates once more as a tactic to control inflation. This would most certainly help some in the long run, however, could have negative consequences on borrowers. Mortgage rates will most likely increase, making it particularly difficult for those with variable-rate mortgages.
What You Can Do About It?
There is no guarantee to fully plan around the prediction of inflation issues, however, expert advice points towards planning ahead. Monthly expenses should be analyzed, grocery shopping altered to more affordable options, energy providers swapped for better rated ones, and public transport budgeted towards. More importantly, paying attention to the governmental aid prepared to be funded towards rising expenses will be key for many.
Looking Ahead
Few months will be focusing on the UK economy in a positive way. There is still further expected issues in the international trading market as well as energy market which puts more uncertainty into how long this economic disaster will last. It is clear that the financial future of the country will depend on the decisions taken by the government as well as businesses in response to this challenge.
Make sure you follow this news and many more as we follow the United Kingdom during this turbulent period and beyond.