The inflation in it United Kingdomwhich is the highest among the countries of the G7, did not register a decline in May as expected by analysts. As reported by the National Statistics Office (ONS) this Wednesday, June 21, remained in a 8.7% year-on-year compared to the previous month.
This figure makes it the Bank of England will almost certainly raise interest rates on Thursday, when he announces his new monetary policy decision, despite the crisis in the cost of living and a weak economy. On average, analysts expected a modest drop to 8.4%.
“We know that high inflation is affecting families and businesses across the country“said the Finance Minister jeremy hunt in a statement, reaffirming a promise to cut inflation in half this year.
Consequently, the Bank of England is expected to raise its interest rate again main, currently at 4.50%, on Thursday. The question lies in whether the increase will be 25 basis points or 50 basis points.
A recession: the solution to inflation
hunt stated in May that he supports the possibility that the United Kingdom dive into one recession if that is necessary for reduce inflation.
In an interview on the television channel skynewsthe minister backed the Bank of England (BoE) in its fight against higher-than-expected prices and said he would support a increase in interest rates towards 5.5%.
“Yes, because in the end inflation is a source of instability. If we want to have prosperity, if we want to grow the economy, if we want to reduce the risk of recession: we have to support the bank of england in the tough decisions it makes,” the minister responded when asked if he was comfortable with the BoE doing whatever it took to reduce inflation, even if it could cause a recession.
Hunt explained that having inflation of 8% per year in the long term is not beneficial for people and considered it a source of instability.
Source: Ambito
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