Warning: this inflation is hot!

Inflation is a global problem and many countries are struggling to bring prices down or to control the fast rising prices.

The cost of living in the United Kingdom continues to rise, putting pressure on both the FTSE index and the Bank of England.

Inflation in the United Kingdom reached a 30-year high of 5.5 percent in January, up from 5.4 percent in December (analysts predicted it would remain at that level) and far higher than 0.7 percent in January 2021.

The FTSE 100 fell 2.85 percent on Wednesday, snapping a week-long winning run, as investors pondered what the figures may imply — Resolution Foundation economist Jack Leslie predicts inflation “could create the sharpest pressure on living standards in six decades.”

The Bank of England will most likely respond appropriately. Some experts predict a 0.75 percent increase in March and a 1% increase in May. Others believe rates will rise at least by 2% within this year based on the January data.

In Dec and Feb, the bank raised rates from their historic 0.1% low to 0.5%.

More Inflation

Funny that analysts at Trading View calls the U.K. the ‘inflation nation’ and here is why.

Inflation in the U.K. reached a 30-year high of 5.4 percent in December, up from 5.1 percent in November, and it is expected to rise to nearly 6 percent in the spring as energy costs rise.

Investors are waiting to see what the Bank of England does with the news at its meeting on February 3, with some predicting harsh rate rises to replicate the Fed’s response — so stay tuned.

Following the release of U.K. inflation figures, the FTSE 100 quickly falls from its two-year highs.

After beginning the week at their highest level since before the epidemic, prices fell 0.63 percent on Tuesday.

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