25 April 2023 - Food inflation at a 45yr high
The inflation rate is still above 10% despite the Bank of England having hiked short-term interest rates eleven times in succession and is set to hike again at its next meeting on May 11th. While the headline is still far too high for the Central Bank’s liking. Component parts are also alarming. Food price inflation is at its highest in 45 years, reaching 19.2% in the twelve months to March, up from 18.2 a year earlier. The Monetary Policy Committee is being accused of showing a significant lack of imagination in using tried and, to date, tested methods to try to counter rising prices despite them having no visible impact thus far. There seems to be an almost fatalistic view being taken over inflation although the policy of little and often over rate hikes clearly fails to work. Both the Federal Reserve and European Central Bank have had a degree of success by using jumbo rate hikes to bring inflation down, while the Bank has used its current tactic for fear of crashing the economy. Beyond Currency Market Commentary: Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.