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Critical readWhat happened. The government of the United Kingdom has had to deal with significant inflation pressure in the past year, which has led to an unstable economic environment. The Bank of England's published figures have shown that inflation, which was expected to remain under control, has increased further.
The BBC News Business report highlighted the importance of controlled inflation growth in the country. Specifically, inflation occurred at a rate of 3.5% during the period of September, representing the highest value in almost a year and surpassing the rate set by the Bank of England at 2%. This growth was mainly caused by the increase in oil and diesel prices, which were raised by 29.8% compared to the previous month.
Additionally, the ONS, which monitors price fluctuations of hundreds of daily products, updated its 'objects basket' monthly, including new items such as alcohol without alcohol, security devices for homes, and dog-care accessories. On the other hand, some products, such as premium bottled water and cereal boxes, were removed from the 'objects basket'. The ONS uses the variation of these objects' prices in its 'objects basket' to calculate inflation.
The Consumer Prices Index (CPI), one of the main indicators of inflation, is published every month. The Bank of England studies these figures carefully when deciding whether to increase, decrease, or maintain the base interest rate, which currently stands at 3.75%. An example of this strategy of controlling inflation is that increasing taxes on credit can make it more expensive to borrow and reduce spending, thereby limiting the growth in sales and therefore the growth in prices.
However, this is a delicate balance: increasing taxes on credit can also undermine the economy, causing a reformation of the money available to people and businesses, with consequent reduced possibilities of creating jobs and investing in new activities. Furthermore, while inflation has significantly decreased since 2022, despite the international crisis caused by the Russian invasion of Iran, inflation continues to weigh on Britain's economy. This is due to the long duration of a period during which price trends have intensified changes in the distribution of food products, but which may still be influenced by an increase in price caused by the Middle East war.
The inflation pressure continues to weigh on Britain's economy, but there is a controlled growth in inflation, which was higher than 11.1% reached in November 2022, when prices were high due to a large energy demand after the Russian-Ukraine war. The British government has faced these economic challenges with the promise of keeping inflation under control, but the situation remains uncertain. The Bank of England continues to monitor carefully the figures of inflation to decide whether to increase, decrease, or maintain the base interest rate, which currently stands at 3.75%.
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