UK Inflation reaches 15-year high amid Ukraine war and China lockdowns

UK Inflation reaches 15-year high amid Ukraine war and China lockdowns

by Pranali Mehta

The cost of household items in the UK, such as clothing, toys, and furniture, has reportedly been increasing at the fastest rate in over 15 years. Fueled by the war in Ukraine and the coronavirus lockdowns in China, the inflation is further intensifying the country’s ongoing cost of living crisis.

According to the British Retail Consortium (BRC) and NielsenIQ’s shop price index, non-food inflation increased from 1.5% in March to 2.2% in April, the highest since the monitor began in 2006.

Meanwhile, food inflation went from 3.3% in March to 3.5% in April, the highest recorded since March 2013, driven by the high prices of energy and commodities such as wheat and oil.

The inflation is further intensifying the cost-of-living pressures, as average gas and electricity bills shot up by more than £700 ($873) a year due to an increase in the country’s energy cap last month.

Helen Dickinson, CEO of BRC, stated that electrical goods, furniture, and books are seeing high price increases while the disruption caused by Russia’s invasion of Ukraine was causing a further rise in energy costs.

Moreover, DIY materials like paint, stationery, and flooring are also experiencing high costs rises as they are majorly imported from China, where many cities including the world’s largest seaport, Shanghai, are under lockdown as part of the county’s strict anti-Covid measures.

Dickinson added that while food costs have been on the rise, fresh food inflation has been slow due to competition between supermarkets who are resisting the hiking prices of several everyday essentials.

Non-food retailers had warned previously that their sales are being affected due to supply disruptions and weak demands, as consumers suffer the biggest squeeze on living standards since the 1950s, limiting their spending in shops.

Sainsbury’s, UK’s second-largest supermarket chain, has also highlighted issues in items that are made in China, such as consumer electronics and TVs. With supply chain difficulties in the east Asia region and a squeeze on its customers’ finances, the retailer is expecting a drop in sales of such products. 

Shares of AO World, household appliances and consumer electronics specialist, saw a one-fifth decline last week as the England-based retailer said that the demand for electrical goods had gradually weakened.

Source credit: https://www.theguardian.com/business/2022/may/04/ukraine-war-china-lockdowns-fastest-uk-price-rises-years

Pranali Mehta

A chemical engineer by qualification, Pranali Mehta dutifully walked down the slated path and worked in a chemical firm for a year. Her passion for writing however, pushed her into experimenting with the same as a career. With over three years of experience in content writ Read more...