UK inflation reached new heights in June
20 Jul 2022
UK inflation reached new heights in June as it climbed to 9.4%, up from 9.1% in May with the rise described by one commentator as a "hammer blow" to households across the country.
It's strange how Central Banks thought transient inflation would not be a problem and now we seem to think that it is less transient and more of a problem. Like the heatwave, this is not something caused by Government as such, although like the heatwave some further preparations could have been made. Also like the heatwave, it is possible to turn a drama into a crisis, and to some extent it depends how you look at the problem, but yes, rising inflation will hurt, and government remedies are limited in scope. What happens in society even though not caused by us can and often does affect us. In this case, it hurts us.
Rising fuel and food costs were the largest contributor to the jump in prices, with motor fuel costs increasing 42.3% in the last year.
Average petrol prices stood at 184p per litre, compared to less than 130p per litre in June 2021, with 18p of that increase coming just in the last month, it is reported, but the “base dates” do determine how you look at the increase. Electric car owners and those working increasingly from home are less affected and that needs to be measured amidst the wailing and gnashing of teeth.
The ONS warns that prices typically fall during the summer as sale season begins, but this was the second year in a row that they had not done so. In 2021, prices continued to rise following the end of coronavirus lockdown, and this year the Russians have and continue to make their contribution. The move away from carbon-based fuels was based on climate change, not pandemics and wars, so we are behind the curve for reasons that are at most only in part the fault of governments (except Russia's, of course).
Andrew Tully, technical director at Canada Life said: "Today's inflation numbers are a further hammer blow to households right across the UK, who will be left reeling from the continuing surge in prices for everyday items.” Another way of putting it is that the rate of rising inflation has slowed, but that doesn't make the “hammer blow” drama cut, and if you don't see too many people reeling perhaps you are following the wrong Journalist. Economists predict the peak of inflation will arrive later in the year, so the half empty brigade tell us that the bad news will only get worse. The Half-full team will take the view that there is light at the end of the tunnel and relief is in sight.
We are hurting and need to do what we can in our own individual circumstances, and government can attempt to take some of the sting out of rising prices, however to some greater or lesser extent we have to suck it up and get on with it. Don't fail to take what steps you can, expect to suffer somewhat, and keep calm and carry on.