First published: Prospectmagazine.co.uk, 20/06/2017
The worst of the rise in inflation is likely over. But as the economy stutters, and with Brexit chaos looming, wage earners will be waiting a long time for any real relief
The recent election, the Grenfell Tower tragedy and Brexit negotiations, which start this week, continue to dominate our news and send shockwaves through the land. The economy continues to rumble on, regardless, but all is not well. Last week, the inflation report for May revealed that the annual rise in consumer prices had risen to 2.7 per cent. Only a short time ago in 2015, the annual change in the index was struggling to remain above zero, and actually failed to do so for a few months. Now it is the highest rate for four years. As if on cue, the Bank of England’s Monetary Policy Committee (MPC) met soon afterwards, and voted 5-3 to keep interest rates unchanged at 0.25 per cent. The MPC hasn’t had this close a call in quite some time. So, is inflation getting to the point, where to cap everything else, higher interest rates are on the way?
The answer to this is almost certainly no—but while inflation won’t bite much harder than it is now, wage earners aren’t out of the woods by a long shot….Read more: