It is no news that the economic conditions and statistics have taken a dip ever since the beginning of the new decade, thanks to the global pandemic which emerged in early 2020. This economic crisis did not spare even the superpowers of the world, including the USA and the UK. There have been significant increases in the prices of everyday commodities, ration, and healthcare. However, to keep at par with these increased prices, the common people have to struggle a lot these days, as their sources of income and their basic mean salary of them have remained the same, if not reduced.
There are many parameters through which anyone can study the situation of the nation and its global ranking. These can be the average salary or income of individuals, import and export data, production data, the GDP of the nation etc. however, one of the most reliable sources of this which are commonly used by experts and economists is the inflation rate. And the inflation rate of the United Kingdom has taken a hit ever since the COVID-19 pandemic. You can read more about the UK inflation rate here.
The United Kingdom is facing one of the worst inflations of all time. And the new change in the sovereign and government can become challenging for the people at the very least. The following article would discuss the current situation in the UK, how bad the condition really is, and how the Brits can overcome this situation now:
What Exactly Is the Inflation Rate?
The inflation rate is an economic indicator that is used to indicate the living conditions of a particular country. It includes the prices of all the commodities and services needed to sustain life and is a direct way to check out how the economy of the country is doing. It has been in use for a few centuries now and is still very prevalent as it is quite accurate and easy to understand. If the inflation rate of a nation is low, that would straight away indicate that the particular currency is stable enough and the basic living standards could be met easily by the common people. A higher one, as it is quite understandable now, would simply mean that the economic condition of the country is not so good, and people would have a harder time adjusting to the increasing prices of basic life essentials.
It can be calculated by a simple formula:
Inflation Rate = (Current Price Level – Earlier Price Level) / Earlier Price Level
What Is The Current Inflation Rate In The UK?
The latest inflation rate data is available for the month of October 2024, which shows that the rate has increased to a new record high of 11.1%. Such high rates have not been recorded since October of 1981, which was exactly four decades ago. The current stats show that this winter is going to be tough for commoners of the Kingdom, as the prices are going to a new high every day.
The rates hit double digits (10%) all the way back in July when Boris Johnson resigned from the post of the Prime Minister of the UK. There have been many factors that have contributed to this rise, but the resignation of Johnson is considered one of the key reasons, as his sudden departure left the investors and business professionals in shock and concern, peeking into a darker future for the realm of the Kingdom.
Why Is The Inflation Rate Increasing?
Well, there are many reasons why the inflation rates are on a rise all across the world, especially in Europe. First is the pandemic. Everyone is aware how COVID-19 and the lockdowns had brought the globe to a stand still. With massive failures in almost every sector of business, and so many lives lost, it was the beginning of the modern recession.
Secondly, the continuous war and invasion of Russia into Ukraine has also contributed greatly to this. There is no doubt that Ukraine has massively suffered and sustained a wound that has brought it down significantly in all aspects. But the rest of the world has been affected deeply by it. The war has stopped the free and smooth inflow of oil and cereals into the European market, forcing it to buy products from different locations at much higher rates.
Thirdly, there is one more reason why the cost of living is continually rising. This is because the payscale of people is failing to keep up with the demands of the market. People are not paid enough to match the market price and hence, are subjected to deal with a very bitter situation. The condition is expected to get even worse with the decrease in temperature, as many households would not be able to spend much on energy or heating.
What Is Being Done?
The newly formed government under the leadership of Rishi Sunak as the Prime Minister is constantly scheming and formulating new plans and methods to keep the prices from increasing any further, and have assured the masses to bring the inflation price down by the end of next year. The government has already introduced a plan that would cap the use of energy for all households and businesses, thereby, somehow reducing the pressure on the system.
The Bank Of England has also proposed that they are expecting a decline in the rates by the mid of next year, 2024. They have cited their reasonings and logic, and are hopeful that the sun would shine a little brighter for the masses by this time next year.
Conclusion:
Inflation rates have been used to measure the cost of living in a country, and is one of the most preferred and accurate tools to do so. The UK has seen a rapid surge in the cost of living, and this year has been tougher than the others. Moreover, the most recent data is really concerning, as it shows an all time record high rate of 11.1%. Things are being done on both, the central and global levels to bring this down, and the Kingdom is expected to make a recovery quite soon.
