![](https://i.imgur.com/CLvY2jA.png")
17-05-2022, 08:20 AM
Phillip Inman
Sun 15 May 2022 00.05 BST
Britain’s hard-pressed households could feel even worse done by this week when official inflation figures show just how fast the cost of living is rising. Economists are forecasting a jump from March’s 7% to 9.1% in April.
If the pundits are right, the consumer prices index will be at its highest level since 1990, when the UK was struggling with one of its worst postwar property slumps and a full-blown recession.
......
economists at ING, said the month-on-month rise would reflect a 54% jump in household gas and electricity bills since the beginning of April, following regulator Ofgem’s lifting of energy price cap.
The Bank of England, citing rising energy costs, has forecast a rise in inflation to above 10% after the summer.
......
Central bank officials are most worried by increases in wages over the past few months of about 5.4%, and the extent to which workers will demand increases in their monthly earnings to keep pace with rising inflation over the next year. This is the much-feared precursor to a wage/price spiral that could push inflation higher for years to come.
......
However, hundreds of thousands of firms are operating with very slim profit margins and know that their customers are tightening their belts: this limits their scope to pay higher wages. These firms are likely to cut back production or reduce the level of service rather than raise prices.
......
Unemployment is forecast to remain low, at 3.8% – the same as the previous month – though this figure is flattered by the 500,000 workers, mostly over-50s, who have quit the labour market in the past 18 months.
And since 2019, the Brexit effect has denied employers some 500,000 foreign nationals who had been expected to become active in the UK labour market.
This combined million-worker gap was important when trying to explain the state of the UK jobs market compared with other similar-sized economies, said Wilson. For instance, in France, where the participation rate through the pandemic has stayed the same, there is no loss of skilled workers and wages remain in check.
https://www.theguardian.com/business/202...tion-rises
Sun 15 May 2022 00.05 BST
Britain’s hard-pressed households could feel even worse done by this week when official inflation figures show just how fast the cost of living is rising. Economists are forecasting a jump from March’s 7% to 9.1% in April.
If the pundits are right, the consumer prices index will be at its highest level since 1990, when the UK was struggling with one of its worst postwar property slumps and a full-blown recession.
......
economists at ING, said the month-on-month rise would reflect a 54% jump in household gas and electricity bills since the beginning of April, following regulator Ofgem’s lifting of energy price cap.
The Bank of England, citing rising energy costs, has forecast a rise in inflation to above 10% after the summer.
......
Central bank officials are most worried by increases in wages over the past few months of about 5.4%, and the extent to which workers will demand increases in their monthly earnings to keep pace with rising inflation over the next year. This is the much-feared precursor to a wage/price spiral that could push inflation higher for years to come.
......
However, hundreds of thousands of firms are operating with very slim profit margins and know that their customers are tightening their belts: this limits their scope to pay higher wages. These firms are likely to cut back production or reduce the level of service rather than raise prices.
......
Unemployment is forecast to remain low, at 3.8% – the same as the previous month – though this figure is flattered by the 500,000 workers, mostly over-50s, who have quit the labour market in the past 18 months.
And since 2019, the Brexit effect has denied employers some 500,000 foreign nationals who had been expected to become active in the UK labour market.
This combined million-worker gap was important when trying to explain the state of the UK jobs market compared with other similar-sized economies, said Wilson. For instance, in France, where the participation rate through the pandemic has stayed the same, there is no loss of skilled workers and wages remain in check.
https://www.theguardian.com/business/202...tion-rises
