In the near future, inflation is predicted to approach the 2% objective once again, but it will rise by around ½% in the second half of this year. In contrast to 4.06% in 2023 and 9.59% in 2022, the average consumer price inflation is predicted to be 3.1% in 2024 and 1.9% in 2025.
UK Inflation Rate for 2024
It is anticipated that the United Kingdom’s annual inflation rate will be 2.2% in 2024, after reaching 7.3% in 2023 and 9.1% in 2022. Before2022, the rate of inflation peaked in 2011 at 4.5 percent and reached its lowest point in 2015, when there was no annual inflation. Since late 2021, the UK has seen a sharp increase in inflation, which peaked in October 2022 at 11.1 percent, a 41-year high. Inflation has steadily decreased since that most recent peak, reaching 4% in January 2024.
What is causing high inflation?
The high rates of inflation that have been observed since 2021 are caused by a number of factors. Global supply chains found it difficult to satisfy the resurgence of demand for products and services following the COVID-19 pandemic. Prices for food and energy, which were already high, went up even more in 2022. Russia’s invasion of Ukraine in February 2022 ended the period of low-cost Russian gas supplies to European markets.
Due to the conflict, there has been a disruption in the world food markets, as Russia and Ukraine are significant exporters of grain products. These causes contribute to the high rate of inflation in Europe and the rest of the world.
Impact of Inflation on Cost Of Living
One of the primary causes of the continued high cost of living in the UK is high inflation; as a result of the sharp rise in energy costs worldwide, the UK’s energy price cap has also climbed significantly. What the supplier can charge customers is restricted by the cap.
The cost of living rose in the UK between 2021 and 2022; in October of 2022, the annual rate of inflation hit a 41-year high of 11.1% before declining in the following months. In March 2024, the inflation rate was 3.2%.