By Matthew Vassallo
UK Inflation figures released earlier this morning made for grim reading, as the UK economy continues to show increasing signs of significant economic stress fractures, across all key areas.
The figures confirmed that UK prices are now rising at their fastest rate in over 40 years, rising to 9% in the preceding 12 months to April, up from 7% in March.
Whilst a further increase was expected and mooted by Bank of England (BoE) Governor Andrew Bailey in his recent public address, today’s confirmation is likely to set alarm bells ringing across the UK’s key economic sectors and into households up and down the country. People across the country are now facing up to the very real prospect of energy prices & food costs spiralling to an almost uncontrollable level over the coming months.
Despite this pessimistic outlook, the Pound has managed to find a pocket of support over the past 24 hours, having seen its value disintegrate against both the Euro & US Dollar over recent weeks.
GBP/EUR fell to a year low last week before yesterday’s recovery, saw it rebound by over a cent against the single currency. GBP/USD rates had fared even worse with Sterling losing over seven cents against its US counterpart in little over a month, before clawing back just over two cents during Tuesday’s trading.
The catalyst for this modest recovery was likely yesterday’s better than expected UK employment figures, which offered a much-needed respite for those holding Sterling positions.
However, with this morning price rises reaffirming the current trepidation & dovish outlook for the UK economy, whether yesterday’s upturn can be sustained is certainly debatable.
Another headache for PM Boris Johnson to add to his forever growing list. Would lesser men have even wilted? Or are we being led down the garden path to economic combustion by the political pied piper?
Time will tell….