UK Inflation Hits 40-Year High

UK inflation hits 40-year high of 9% after energy bills soared.

The 9% rise in the consumer price index is the highest since records began in 1989, outstripping the 8.4% annual rise posted in March 1992 and well ahead of the 7% seen in March of this year.

The Bank of England has hiked interest rates at four consecutive meetings, raising the cost of borrowing from its historic pandemic-era low of 0.1% to a 13-year high of 1%, as it looks to rein in runaway inflation without stomping out economic growth.

A quarter of Britons have resorted to skipping meals as inflationary pressures and a food crisis conflate in what Bank of England Governor Andrew Bailey recently dubbed an “apocalyptic” outlook for consumers.

Wednesday’s enormous inflation result delivers another huge blow to UK’s households who are already worried about the cost of living, and there are warnings that the worst is yet to come.

This will add more pressure on the Bank of England to increase interest rates and get to grips with soaring prices even if many of the factors driving inflation are beyond their control.

Later today, Canada will release its CPI results at 15.30 GMT+3.

USD/CAD Daily Outlook – USD/CAD stays neutral and outlook is unchanged. Pull back from 1.3075 could extend lower, but further rise is in favour with 1.2712 support intact.

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