Inflation is set to be higher in the UK

The International Monetary Fund and the Organisation for Economic Co-operation and Development, which has 38 member countries said the  World is going towards the worst recession and the UK growth would be only 0.5 per cent in 2023, the future gloomy growth forecast. The Economic Central Bank forum that the UK economy is The UK’s economic number, and those across Europe and the world have shrunk from the pandemic, and from Russia’s invasion of Ukraine, which has been an overwhelming driver of high inflation and slower growth for most European countries.

Andrew Bailey, the Bank of England governor, warned inflation is set to be higher for longer here in the UK with weaker growth in the economy. He said, “ I think the UK economy is probably weakening rather earlier and somewhat more than others, and that’s been somewhat evident now for a few months”.

Retailers too have said they have started to expect different outcomes for the UK versus the rest of Europe.  The boss of the owner of Boots Stefano Pessina said he suspected the UK will have a big recession, probably bigger than other European countries. Pepco, which owns Poundland said in its results in the UK customers were scaling back even on essential purchasers.

The Sterling has fallen against the dollar over the past year, adding to inflationary pressure for imported fuel and energy. Although the figures are volatile, the key measure of the UK trade performance, the current account, reached its worst levels on record in the first quarter.

Economists predicted that Brexit would make the trade-off between inflation and growth more difficult, both because of trade barriers and labour shortages. UK labour market is less flexible with a smaller pool of workers. The UK firms are seeing less competition from Europe, and are increasing margins and therefore prices.