UK Inflation is soaring to dangerous levels
Once unleashed, inflation is notoriously difficult to control
INFLATION jumped to 5.2 per cent last month, taking economists by surprise and piling pressure on the coalition government. The figures released yesterday suggest an increase in utility bills was largely to blame. The rate is the highest CPI measure since September 2008. Inflation based on the retail price index was 5.6 per cent, the highest for more than 20 years. Are things getting out of control?
Inflation at worrying levels
"Corrupter of the currency, insidious enemy of the prudent, that sneak thief inflation is back to prey on savers", says an editorial in the Daily Mail. As prices soar faster than they have for 20 years, "earners face an increasing struggle to heat their homes and keep food on the family table".
Welfare rises not justified
The September inflation figures matter more than most, says economist Tony Dolphin in The Guardian. They are used as the measure to raise social security benefits and state pensions for the following year.
Recent developments make it likely that unemployment will also be higher than forecast and "this too will add to the projected social security bill", adds Dolphin.
How can an increase in welfare payments for anything other than pensions be justified when average wages are rising at just 1.8 per cent, asks the Daily Mail. "These are the toughest of times – and they demand the toughest of measures to match them."
Trouble for Osborne, trouble for the UK
The stark reality for George Osborne is that, under his stewardship, the UK now has one of the highest rates of inflation and one of the lowest rates of growth in the EU, blogs George Eaton in the New Statesman. As low and middle earners are squeezed, "the pressure will intensify on the Chancellor to offer some relief".
The outlook for the British economy is bleak if the Government can't get inflation under control, says an editorial in The Daily Telegraph. September’s "shockingly bad figures" mean the UK has the highest inflation of any major Western economy.
The government "must reassert the primacy of low inflation", adds the Telegraph. "Once unleashed, inflation is fiendishly difficult to get back under control."