PUT THE POLITICIANS ON THE MINIMUM WAGE AND WATCH HOW FAST THINGS CHANGE
Civilisation has operated in two ways - To make one part of society more affluent and the other more wretched than would have been the lot of either in a natural state
There are Natural Rights and Civil Rights. Life, Liberty and the Pursuit of Happiness
Where Our Power to Execute Our Natural Rights is Perfect, Government has No Legitimate Jurisdiction
When the Forces for War are Greater than the Forces for Peace   Then the World is in Danger
Politics is not a Dirty Word. It is a Way of Life. How is Your Way of Life Today ?

IS BRITAIN HEADING FOR A 1989 THATCHER/ CALL ME NIGEL, CORRECTION ?

RISING INFLATION WHICH LED TO A 5 YEAR COLLAPSE IN THE HOUSING  RETAIL & JOBS MARKET.

INTEREST RATES COULD RISE RAPIDLY BY THE END OF 2021….

…ITS HOW BANKS MAKE MOST PROFIT

The Radical

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Shop discounts keep inflation in check but BoE’s price rise forecast still stands

London, UK
The Bank of England as inflation dropped to 2% in July. Photo: Getty

Wednesday’s UK inflation figures have provided a short-term respite ahead of a big hill to climb in terms of the post-COVID economic recovery. 

Analysts across the board have noted the drop to from 2.5% in June to 2% in July recorded by the ONS was merely a blip and that the pullback doesn’t invalidate the Bank of England’s forecast for inflation to hit 4% before 2022 — double its target rate. 

The consumer price index was held back by an artificial bump in prices a year ago when the ONS stopped using estimates and started measuring prices. When this drops out of the figures, inflation will rise.

At the time of its 4% forecast, the Bank said price rises were set to hit a 10-year high in the final quarter of 2021. The forecast suggested the Bank may have to consider increasing borrowing costs via an interest rate hike. 

“We are not out of the woods quite yet,” said Danni Hewson, financial analyst at AJ Bell. “Nando’s is the latest restaurant to be hit by supply chain issues, which are expected to continue right through the rest of the year. The prices paid and charged by factories are still going up and shortages and shipping costs will make the next few months a rather expensive business for importers.”

Watch: What is inflation and why is it important?

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Hewson says that job numbers and wage hikes announced on Tuesday will all also tie into this picture. 

The U-shaped recovery in the labour market is causing labour shortages in some industries like health and social work and wage inflation. Underlying wage growth increased to 4% in the three months to June. But the picture is also being complicated by the wind down of furlough, which is yet to play out in data. 

“If people have more to spend, they might be prepared to keep spending just that little bit more and businesses might need to push up prices to cover their costs, creating a lovely muddy circle.”

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