Official figures show that British annual inflation hit a nine-year high on the economy, which reopened in August, but last year’s figures were slashed by a restaurant discount scheme.
The Consumer Price Index (CPI) rose to 3.2 percent, the highest level since March 2012, the Office for National Statistics said in a statement.
It pointed to a record acceleration of 2.0% in July, but the ONS warned that growth would be temporary.
Global markets have seen fears this year that the central bank will end coveted support measures to curb inflation, but policymakers insist the price rise will be short-lived.
However, the Bank of England has warned that inflation will reach 4.0 per cent in the fourth quarter – doubling its target – due to the reopening of economies and global supply shortages caused by epidemics.
“August saw the biggest increase in monthly annual inflation since the series was introduced about a quarter of a year ago,” said Jonathan Atho, an ONS statistician.
“However, most of this is likely to be temporary as restaurant and cafe prices fell sharply last year due to the ‘At Out to Help Out’ scheme, while prices have risen this year.”
In August 2020, inflation was affected by the discount scheme and temporary tax cuts aimed at boosting the quaid-affected economy.
EY Economist Martin Beck notes, “The majority of August’s rise was due to comparisons with the weaker 2020s. Last August saw both a reduction in VAT for the hospitality sector and an out-of-help scheme.” “
The ONS added on Wednesday that manufacturers are experiencing a sharp rise in costs.
Raw materials rose 11 percent in August from 10.4 percent in July.
The UK’s economic recovery is being hampered by epidemics, supply chain disruptions and high commodity prices.
According to the latest data, the economy grew by only 0.1% in July, compared to 1.0% in June.
Economists fear that rising global inflation will continue to be a burden on the world’s economic recovery.
In the UK, costs will continue to rise this year due to a “persistent” epidemic, Boeing Governor Andrew Bailey has warned.
“We have two things going on globally,” Bailey said last week.
“There is an increase in global demand and especially global demand for goods and this has led to an increase in commodity prices.
“The other thing is this imbalance of goods and services. We have received a lot of demand for services and more than a year.”
This was affecting global trade and creating supply chain problems around the world, exacerbated by a chronic shortage of semiconductors.
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