By Patrick Brogan
The uncertainty of Britain’s future is impacting on inflation rates there still. The Bank of England has aimed to keep inflation at just 2%, but yesterday it hit 2.9%, the highest it has been in four years. This has impacted on the Pound.
Many essentials, like food, energy and clothing all rose in price. Many economists have blamed austerity measures and say this should be reversed if Britain is to bounce back. The recent British General Election has not helped. If the markets hate anything, it is uncertainty. Theresa May planned on extending her majority and therefore strengthening her hard Brexit stance. Now, the opposite has happened. Labour nearly equalled the Torie’s vote percentage wise, and this has eroded her mandate. Add to this, the DUP coalition will almost certainly mean a softer Brexit.
As this anxiety continues, inflation will almost definitely go up. This will reflect badly on Prime Minister Theresa May and will add to her woes. How she responds is vital for inflation rates and a wrong move here could trigger another election.
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