Inflation surged this week, pushing the cost of living up by 5.1% in the last 12 months to November 2021, a rise from 4.2% in the previous month and at its highest since 2011.
In our transport business we have noticed a steep rise in fuel costs, which has meant we have had to raise our own prices, the first time in 8 years for some of our customers! Higher transport and energy costs have been the culprit, driving the rise and inflation, which was above the ONS forecast of 4.7% for this period.
This trend is nothing new. More expensive fuel, energy, clothing and second hand cars are big factors – but should the Bank of England (BoE) increase interest rates? I don’t think there is a need for it. People’s buying capacity is diminishing, fewer people have disposal savings following the ‘boom’ after the initial lockdowns, plus the cost of raw materials also rose significantly.
Companies, like some of ours, have struggled to keep up with massive B2B and consumer demand last year that has caused the price increases. Global supply chain problems and staff shortages aren’t helping.
But this is a global statistic. Not just the UK. So how will the UK respond?
I don’t think it would be needed or welcomed if the BoE increased interest rates.