The Limited Times

Now you can see non-English news...

UK inflation is surprisingly falling

2021-08-18T17:25:11.558Z


In Germany, inflation is higher than it has been since 1993 - and many people are worried. Meanwhile, inflation in the UK has weakened noticeably, especially in clothing.


Enlarge image

Street scene in London: clothes and shoes in particular no longer rose so much in price

Photo: Tolga Akmen / AFP

As in many European countries, inflation in Great Britain has recently risen sharply.

The rate climbed from 0.4 percent in February to 2.5 percent in June.

Now, however, the rise in consumer prices in the country has surprisingly weakened.

The prices in July were only 2.0 percent above the previous year's level, according to official data.

The prices for clothing, shoes and computers in particular slowed development.

The prices for alcohol and tobacco have also not risen as sharply year-on-year as in June.

On the other hand, transport costs remain a major price driver.

British key interest rate stable at 0.1 percent

So has the UK done what Germany is waiting for?

Inflation is at least back in the target range of the Bank of England, which, like the European Central Bank, is aiming for a mark of around two percent.

In the USA, the euro zone and also in Germany, the inflation rate has recently been significantly higher - in this country it was 3.8 percent in July.

Many people are concerned about the sharpest rise in prices since 1993, but the Federal Government considers it only a temporary phenomenon because wages are not rising accordingly.

In Great Britain, however, the rate of inflation rose sharply a year ago in July - when the British economy slowly recovered from the first lockdown in the wake of the corona pandemic.

Consequently, from the point of view of economists, the slowdown is more of a snapshot.

The decline in the rate of inflation obscures the strength of the current inflationary pressures in the UK economy, said Yael Selfin, KPMG's chief economist in the UK.

Meanwhile, there are areas where prices have increased enormously.

British real estate prices, for example, rose more sharply before the expiry of tax breaks than they have been in around 17 years.

In June they increased by an average of 13.2 percent compared to the same month last year.

The monetary authorities on both sides of the Atlantic are currently assuming that consumer prices will continue to rise over the course of the year as the economy reopens after the recent lockdown.

So far, the Bank of England expects inflation to climb to four percent by the end of the year and the beginning of 2022.

However, she expects the increase to be temporary.

At their most recent interest rate meeting, the central bankers around their boss Andrew Bailey did not cut back on their extensive economic aid - and left the key interest rate at 0.1 percent.

apr / Reuters / dpa

Source: spiegel

All business articles on 2021-08-18

You may like

News/Politics 2024-02-15T07:51:30.936Z

Trends 24h

Latest

© Communities 2019 - Privacy

The information on this site is from external sources that are not under our control.
The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.