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UK suffers worst inflation rate in G7 amid record soaring prices

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
A woman holds British Pound banknotes in this illustration, May 30, 2022. (File by Reuters)

Britain is suffering the worst inflation rate among the G7 countries with skyrocketing prices further tightening the squeeze on the British public.

According to figures provided by the Office for National Statistics (ONS), the inflation reached yet another new record on Wednesday, registering a 40-year high record of 10.1 percent. Britons are feeling the pinch of the deepening cost-of-living crisis.

The UK inflation rate comes well ahead of that of the United States and Germany, currently standing at 8.5 percent. Italy with 8.4 percent, Canada with 7.6 percent, France with 6.8 percent, and Japan with a 2.4-percent mark make up the remaining countries of the G7.

Martin Beck, chief economic adviser to the EY Item Club, said the UK is facing a combination of crises in the US and Europe, and therefore experiencing higher inflation than either of the two.

Speaking to The Telegraph, he said, “We have got the US’s excess demand for workers and the Europeans’ massive energy bill issues, so we have got the worst of both worlds when it comes to inflation.”

The new inflation rate is even higher than the 9.8-percent figure predicted by most economists, and signals a further deepening economic crisis for millions of Brits.

The alarming point is that the double-digit inflation comes just months before the rise of energy costs in October, with the Bank of England (BoE) warning that UK inflation is likely to peak at 13 percent after the increase of energy bills.

The new consumer price index comes on the heels of an increase in the interest rate for the sixth time in a bid to bring the situation under control.

Britain is bracing for a new Prime Minister after Boris Johnson’s resignation following a string of scandals. Johnson’s spokesperson has said there will be no further economic intervention by the government before the Tory leadership race ends on September 5.

The two remaining contenders in the British prime ministerial race are former Chancellor Rishi Sunak and Foreign Secretary Liz Truss, who pledged on Wednesday night to combat inflation if she becomes Prime Minister by tackling “economic orthodoxy.”

A spokesman for the Truss leadership campaign said she is against the tax rises. “You cannot tax your way to growth, and business as usual will not do.”

“We need a new approach to the economy, we need to challenge the failing economic orthodoxy and we need to deliver the necessary reform to tackle inflation and achieve sustainable growth,” the spokesman said.

However, earlier at a hustings, Rishi Sunak stood against his rival and said her plans would fuel inflation. “What I will not do is pursue policies that risk making inflation far worse and lasting far longer.”

Regardless of who wins the race, the new Prime Minster will face a raft of economic issues including the skyrocketing inflation, a looming recession, surging food prices, soaring energy bills, steepest real pay cuts, and a stagnant economy which is bringing the British pound currency to a historic low.

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