Q&A: Why Is The UK's Inflation Worse Than The Rest Of The G7?

Q&A: Why Is The UK's Inflation Worse Than The Rest Of The G7?

almost 2 years ago1 min

Question: “Why is the UK's inflation worse than the rest of the G7?”

Answer: “It’s a combination of things, Louis. Firstly, the UK is less self-sufficient than, say, France: it imports more energy than it exports, meaning it's more exposed to the price surges we’ve seen. Secondly, it’s done less to protect consumers from higher fuel bills, cutting fuel tax by just 5p a liter compared to Germany’s 25p. Thirdly, Brexit: trade barriers alone are estimated to have pushed up food prices by 6% between December 2019 and September 2021. It's also made it harder for foreign workers to get jobs in the UK, leading to more severe worker shortages and forcing companies to increase wages – and in turn their own prices – to attract talent. On top of all that, the pound has slumped in the last few months, making it more expensive to import goods. And breathe.”

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