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Roundup: UK inflation expectations hit record as gov't plans support package
2022-06-11 00:00:00.0     星报-世界     原网页

       

       LONDON, June 10 (Xinhua) -- Despite the government's support packages, including a latest one on housing, the cost-of-living crisis continues to rage in Britain.

       A survey published by the Bank of England (BoE) on Friday showed that the public's expectations for the rate of inflation were at record highs.

       Median expectations for what inflation will be in the coming year stood at 4.6 percent, up from 4.3 percent in February and at their highest level since 1999, according to a quarterly survey conducted by market research company Ipsos on people aged 16-75 across the country in May.

       Asked about their inflation expectation in the 12 months after that, the respondents gave a median answer of 3.4 percent, up from 3.2 percent in February and the highest since 2013, far above the BoE's 2 percent target, the survey showed.

       Sixty-six percent against 9 percent of the survey respondents expected the economy to end up weaker rather than stronger if prices started to rise faster. In February, the respective figures were 59 percent and 7 percent.

       In April, Britain's inflation soared to 9 percent, and the BoE projected a figure exceeding 10 percent for the end of this year. Sixty-two percent of the respondents to a YouGov survey conducted in May considered economic issues as the country's most critical problem.

       Adding insult to injury was a report released by the British automotive services company RAC on Thursday, according to which the average cost of filling a 55-liter family car has passed the 100 British pounds (123 U.S. dollars) mark for the first time.

       "It's a truly dark day," RAC fuel spokesperson Simon Williams said. "With average prices so high ... there's almost certainly going to be upward inflationary pressure which is bad news for everybody."

       Nearly 80 percent of adults in Great Britain reported feeling very or somewhat worried about the rising costs of living, and 68 percent who said their costs of living had increased reported spending less on non-essentials, according to a survey released by the Office for National Statistics (ONS) on Friday.

       "For some, the reality is already much starker with families ditching non-essentials to meet the bills, canceling holidays, missing bill payments and some parents even skipping meals to ensure their children can eat," said Alice Haine, personal finance analyst at the London-based investment company Bestinvest.

       Signs are pointing to a slowing British economy. In May, the headline seasonally adjusted S&P Global/CIPS UK Services PMI Business Activity Index showed the slowest increase in output volumes since the current period of expansion began 15 months ago, a report said on Tuesday.

       The month-on-month loss of momentum was larger than any seen since the survey began in July 1996, aside from those due to the COVID-19 lockdowns, the report added.

       Also, business activity expectations at construction companies in the country have been the least upbeat since August 2020, according to S&P Global, a New York-headquartered market intelligence company, and the Chartered Institute of Procurement and Supply (CIPS), a Britain-based global procurement and supply organization.

       Quarterly economic growth is expected to "grind to a halt" this year before dipping briefly into negative territory as global events continue to weigh heavily on the British economy, said a report by the British Chambers of Commerce on Wednesday.

       According to an economic outlook released by the Organization for Economic Cooperation and Development (OECD) on Wednesday, the country's output is projected to grow by 3.6 percent in 2022 before stagnating in 2023.

       To support UK households, especially lower-income ones, Prime Minister Boris Johnson announced on Thursday a plan to boost home ownership, three days after he won a no-confidence vote among Conservative Party lawmakers, saving his precarious premiership.

       Paul Dales, chief UK economist at the London-based consultancy Capital Economics, said on Friday that Johnson had announced some policies to help shore up his popularity with more expected in the coming weeks, noting it is likely for a cut in income tax to be brought forward.

       The government is also planning to start a process to use domestic law to override parts of the Brexit Northern Ireland Protocol, which could undermine the country's currency.

       "The net result is that politics is adding to the current inflationary pressure by lending some support to demand and contributing to a weaker pound," Dales noted.

       


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关键词: non-essentials     Median expectations     survey     Britain     country's     February     percent     inflation    
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