Rate of UK inflation to keep rising in 2022: Bank of England

08 Aug '22

2 min read

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The Bank of England recently forecast that the rate of domestic inflation will keep rising this year, but is expected to slow down next year, and be close to 2 per cent in around two years. The prices of some things may, however, stay at a high level compared with the past. In June this year, prices had risen by 9.4 per cent compared to a year ago.

The bank said the main causes of the current high rate of inflation are not likely to last. It is unlikely that the prices of energy and imported goods will continue to rise as rapidly as they have done recently.

The bank also expects some of the production difficulties businesses are facing to ease. Less demand for goods and services in the United Kingdom should also push down prices, it said in a note.

Higher energy prices are one of the main reasons why the rate of inflation is so high. Russia’s invasion of Ukraine has led to more large increases in the price of gas. Since May, the price of gas has doubled. The bank thinks those price rises will push inflation even higher over the next few months, to around 13 per cent.

Higher prices for the goods the country buy from abroad have also played a big role, the bank said. There is also pressure on prices from developments in the UK.

Fibre2Fashion News Desk (DS)

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