Why is the inflation rate refreshed?
UK inflation is rising at the fastest pace in 30 years, according to the latest figures released by the Office for National Statistics (ONS). As a result, our cost of living crisis is deepening.
The consumer price index (CPI) showed the cost of living rose for an eighth straight month to 7% – the highest level since March 1992 (7.1%). This is mainly reflected in rising fuel and energy costs, as well as clothing and footwear costs, borne by households.
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Principal Cause
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Inflation is a variable that can go down as well as up.
During the 2020 lockdown in the UK due to the Covid-19 pandemic, inflation was low as people were unable to go out and spend money. But as societies begin to reopen and businesses open their doors again, pent-up demand for goods and services is here to stay.
This demand, combined with the persistence or, in some cases, reduction in supply, incentivizes companies to raise prices and stimulate the economy. The main reason for the rising prices is the increase in global energy costs. In addition, the global situation has also had an impact on the economy, further driving up the cost of energy, food, etc.
Mainly in these areas
Inflation in the UK has reached its highest level in the past 30 years.
The BBC reports that nearly 20 million households will see their fuel energy bills rise by an average of £693 from April 2022.
At the same time, transport costs and insurance costs for companies, self-employed and workers have also been affected.
On top of that, food prices continue to rise and gas bills are at an all-time high.
Energy prices rise
The cost of energy in the UK has risen by more than 50% in recent months, which has directly caused the cost of housing to almost double! Many customers have received official emails, and energy suppliers have clearly notified that the price of electricity and water will be increased. Although there may be differences between companies, the general trend is a sharp rise.
Increased travel costs
Air passenger tax and vehicle excise tax rates are increasing.
Fares on regulated rail in England and Wales rose by as much as 3.8%, the most in nine years.
The cost of the Oyster Card will increase by 10p in Zone 1 and between 10p and 30p in the rest of London.
Bus tickets will increase by 10p to £1.65, a rise of 6.5%.
For private cars, rising oil prices due to rising energy also increase travel costs.
Payroll and Insurance
According to the Office for National Statistics (ONS), wages in the UK will rise by 3.8% between November 2021 and January 2022.
Taking inflation into account, our wages are actually down 1% from 12 months ago. This is because wages have not kept pace with inflation.
In addition, according to the official website of the British government, from April 2022 to April 2023, the national insurance contribution rate in the UK will be increased by 1.25%.
How to adapt to new challenges
Facing inflation and rising prices, perhaps we can reduce living expenses, reallocate assets, etc., to increase our risk resistance.
On the one hand, energy companies with higher cost performance can be selected as the preferred choice, and on the other hand, we can pay attention to the exemption policy issued by the government.
Finally, you may be able to pay attention to the latest tax policies released by us to learn real-time information so that you and the company can make timely adjustments. If you have any questions, please contact us.
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