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Updated September 15th, 2021 at 21:24 IST

UK's inflation spikes to highest rate in 9 yrs as pandemic impacts food and petrol prices

UK’s annual inflation rate rose by 3.2% marking the biggest rise since 2012 and signalling that food, petrol and energy prices might overheat the economy.

Reported by: Aanchal Nigam
inflation rate
IMAGE: AP | Image:self
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UK’s annual inflation rate rose by 3.2% marking the biggest rise since 2012 and signalling that food, petrol and energy prices might overheat the economy. Britain’s Office for National Statistics (ONS) said on September 15 that the consumer prices were up 2% since July and the annual rise was also the biggest since March 2012. The rise in inflation in several nations was due to higher oil prices, shipping problems and even shortages of components for cars and other goods. Just last month, the eurozone inflation hit 3% which was also the highest in a decade. 

ONS said in a statement on Wednesday, “The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 3.0% in the 12 months to August 2021, up from 2.1% in the 12 months to July.”

UK's largest independent producer of official statistics noted that the increase of 0.9 percentage points is the largest ever increase recorded in “the CPIH National Statistic 12-month inflation rate series, which began in January 2006; however, this is likely to be a temporary change.” As per the Sputnik report, the UK figures might have also been bumped from the Boris Johnson-led government’s Eat Out to Help Out scheme. The scheme, introduced to tackle the impacts of the COVID-19 pandemic on the hospitality sector, offered diners a discount on meals in August 2020.

Meanwhile, the Bank of England has reportedly predicted that inflation will hit 4% later in 2021 and has also blamed the higher prices amid bottlenecks created in the pandemic. Notably, the prices of second-hand cars have also shot up by over 18% since April due to the scarcity of new models. ONS stated, “The Consumer Prices Index (CPI) rose by 3.2% in the 12 months to August 2021, up from 2.0% in July: the increase of 1.2 percentage points is the largest ever recorded an increase in the CPI National Statistic 12-month inflation rate series, which began in January 1997; this is likely to be a temporary change.”

UK house prices up by 8%

ONS, in a separate statement, said that the average house prices in the UK increased by 8% over the year to July 2021 but down from 13.1% in June 2021. It added, “the average UK house price was £256,000 in July 2021, which is £19,000 higher than this time last year, following the record high of £265,000 in June 2021.” ONS also cited the latest house price data published on the official website of the British government by the HM Land Registry for July 2021.

ONS stated, “Because of the impact of the coronavirus (COVID-19) pandemic on both the number and supply of housing transactions, we might see larger revisions to the published House Price Index (HPI) estimates than usual.”

“Fewer transactions are available than expected for the July 2021 estimate. As a result, there may be increased volatility in this month's estimates, particularly at the lower geographical levels where transaction volumes are smaller,” it added.

IMAGE: AP

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Published September 15th, 2021 at 21:24 IST

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