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Are consumers to blame for high inflation?

It's not the first time a BoE member has blamed the public for continued red-hot inflation..


Brits were waking up to a tough narrative this morning after reading comments from BoE member Huw Pill. The headline reads "people need to accept they are poorer". Certainly not something anyone wants to hear to be honest, but unfortunately it's a bitter 'pill' to swallow under the current circumstances..

Consumers are so far maintaining their spending habits in a time when prices for goods are sky-high. This mixed with workers asking for pay rises to combat higher living costs, is leading to businesses hiking prices further. The increasing of interest rates is supposed to make people reduce their spending so that the demand for goods comes down and prices therefore fall. 

Last year, BoE Governor Andrew Bailey urged the pubic to not ask for big pay rises to try and stop prices rising further. This hasn't materialised and inflation remains red-hot. With food prices in particular facing a 3-9-month lag in shops, the current high cost of goods is here to stay throughout the summer at least it loos like. This news presents good news for GBP, but bad news for consumers..

As mentioned in previous reports recently, historically, April has been a good month for the Pound (true for this year also). May & June however, has been an entirely different story. This is not meant to scaremonger, just a warning for those that think the Pound is destined to improve/recover in the coming weeks/months. 6 out of the last 7 years has seen the £ fall at an average rate of 2% versus the €..