UK Inflation Surges to 10-Month High Amid Rising Costs & Private School Fees VAT

[Social Media]

 

Inflation in the UK has surged to its highest level in ten months, driven by increasing food prices, airfares, and the recent application of value-added tax (VAT) on private school fees. The latest data from the Office for National Statistics, released on Wednesday, shows that consumer prices rose by 3% in January compared to the previous year, up from 2.5% in December. This exceeded the 2.8% forecast by economists and the Bank of England (BOE).  

 

The figures are likely to reinforce the BOE’s cautious stance on cutting interest rates, despite concerns over the UK’s struggling economy. While BOE Governor Andrew Bailey has downplayed the risks of an inflationary surge, officials remain wary of “second-round effects” that could prolong underlying inflationary pressures. The central bank expects inflation to peak at 3.7% in the third quarter due to rising energy costs.  

 

A key concern for the BOE is inflation in the services sector, which is closely monitored for signs of domestic price pressures. Service-sector inflation accelerated to 5% in January from 4.4% in December, though it remained slightly below the BOE’s 5.2% forecast. Following the report, the pound pared its earlier gains and remained relatively stable at $1.2616.  

 

The increase in inflation distances the economy further from the BOE’s 2% target, and analysts anticipate further price hikes in the coming months. Rising energy bills are expected to be a major contributor, with energy consultancy Cornwall Insight Ltd. forecasting another increase in the energy price cap in April. This would mark the third consecutive quarter of rising gas and electricity bills, adding more pressure on households.  

 

Earlier this month, the BOE lowered interest rates for the third time since August, but policymakers warned that any further reductions would be “gradual and careful.” Market expectations suggest only two additional rate cuts this year, which would bring the base rate down to 4%.  

 

The case for a cautious monetary policy approach was further reinforced by labor market data released on Tuesday. Wage growth reached an eight-month high in the fourth quarter, while the job market remained more resilient than expected. Tax records indicated an increase in the number of payrolled employees in January, with job losses remaining minimal despite the impact of Labour’s national insurance hike for businesses and the minimum wage increase.

 

Based on a report by Bloomberg  2025-02-20

 

 

[ronster]

Inflation= greed ! 

Basically someone at the start of a chain wants more money so it filters all the way through to the end to provide whatever item.

[JonnyF]

No surprise.

 

Rachel from accounts and her budget for recession were bound to destroy the UK economy.

 

This is just the beginning.

 

Classic Labour. 

 

 

[Snackbar]

Rachel with an MBA in customer service 

[Red Forever]

Hmm… a non partisan article from Bloomberg which states that things UK financially and employment wise ain’t as bad as the far right posters here wanted them to be.

Suck it up eraser Jonny and greasy spoon!

[sandyf]

4 hours ago, ronster said:

Inflation= greed ! 

Basically someone at the start of a chain wants more money so it filters all the way through to the end to provide whatever item.

Narrow minded, the recent inflationary spike is more to do with government, both current and previous, mismanagement than anything else.

if they cannot afford to pay their bills everyone in the country has to chip in. Come election time they will get some back from tax cuts, then pay again later.

 

[tension22]

My old mate Alex used to go to Sidcot school, his nan paid 15,000 per year, according to this ( https://www.vatcalculators.co.uk ) that would now be 18,000 😞

[Purdey]

On 2/20/2025 at 3:07 AM, Social Media said:

job losses remaining minimal despite the impact of Labour’s national insurance hike for businesses

So many Chicken Littles must feel put out.

[Chomper Higgot]

On 2/20/2025 at 12:45 PM, JonnyF said:

No surprise.

 

Rachel from accounts and her budget for recession were bound to destroy the UK economy.

 

This is just the beginning.

 

Classic Labour. 

 

 

Accept the reality is different from your constant doom mongering:

 

https://www.bloomberg.com/news/articles/2025-02-16/uk-s-much-feared-wave-of-job-cuts-is-failing-to-materialize

 

https://www.theguardian.com/business/2025/feb/21/uk-hiring-on-the-rise-as-confidence-lifts-research-suggests