British inflation has been as high as 13% this year on an annual basis and is behind a cost-of-living crisis in the country that’s heavily affected some Britons this year and pressured leaders to find a solution. File Photo by Andy Rain/EPA-EFE
Sept. 14 (BP) — Much like the United States, Britain saw inflation slow a bit during the month of August due mainly to lower energy costs, including gasoline.
Data from the Office for National Statistics Wednesday showed that inflation slowed to 9.9% for the 12 months ending in August. In July, that figure was over 10%. Inflation increased by a half-percent from July to August.
British inflation has been as high as 13% this year on an annual basis and is behind a cost-of-living crisis in the country that’s heavily affected some Britons this year and pressured leaders to find a solution. Some analysts say Britain could enter a recession before the end of the year.
ONS data showed Wednesday that core inflation — a measure that excludes food and energy costs — was up 0.8% from July. Overall consumer costs in August were 6.3% higher than they were a year ago.
“Rising food prices made the largest, partially offsetting, upward contribution to the change in the rates,” the government office said in the report, according to CNBC.
The inflationary behavior in Britain is similar to that of many other countries. In the eurozone last month, prices increased more than 9% — and the United States saw an annual rise of 8.3%. However, the U.S. figure marked the second straight month of slowing inflation.
To help control inflation, the Bank of England raised interest rates by a half-point in August and is expected to order a 0.75% hike at its next policy meeting on September 22. File Photo by Andy Rain/EPA-EFE
In Britain and the United States, a major factor in the inflation rate has been energy prices. U.S. gas prices have come down dramatically over the summer.
The British economy has been squeezed by several factors this year, including high wholesale gas prices and supply disruptions caused by Russia’s war in Ukraine. In response, the Bank of England voted in August to raise interest rates by half-point, which was the sixth hike since December and Britain’s largest since 1995.
Britain’s central bank is expected to raise the rate by three-quarters of a point at its next policy meeting on Sept. 22. The U.S. central bank has hiked rates by 0.75% at its last three meetings.
In her first major move as Britain’s new prime minister last week, Liz Truss announced a plan to help millions of Britons pay their utility bills by capping costs. The move is expected to save the average British home about $1,000 per year. Economists projected the plan would cost $230 billion and curtail inflation in the short term.