As the nation braces for data showing a further surge in consumer prices. The U.K.’s inflation-fighting baton will pass from the Bank of England to the Treasury this week.
The cost of living is a determining factor in the economy of any nation and the U.K. has showed commitment towards fighting inflation in order to reduce it. The new regulations to be expressed by Chancellor Sunak will be a direct reflection of such commitment.
Chancellor of the Exchequer Rishi Sunak will deliver his Spring Statement on Wednesday. The mini-budget may feature new measures to help firms and households, and will reveal revised economic forecasts that take into account the jump in prices with an existing cost-of-living crisis exacerbated by the war in Ukraine.
After the U.K. reports February inflation data that are expected by economists to show an acceleration to 5.9%, which is considered a high not seen in 3 decades. The scale of Sunak’s task may be slightly clearer by the time he speaks.
That may well turn out to be just be another staging point on a journey higher. The BOE, which hiked interest rates last week, warned that inflation could briefly hit double digits later this year.
The events of Wednesday form part of a busy week for the U.K. economy, with reports on public borrowing and retail sales also due, as well as a record of the BOE’s March financial policy meeting.
The risk of stagflation will remain at the forefront of investors’ minds, with U.K. inflation data set to show price pressures increasing further.