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UK Inflation data for April came in at 8.7% – above all expectations with food inflation sitting at a huge 19.1%.
The big problem is that the only reason UK inflation fell is because of the price energy cap increase from last April falling out of the data.
I go through the data and cover the Bank of England’s testimony in UK Parliament yesterday.
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UK Economy In Big Trouble – Inflation Is UGLY
The United Kingdom is currently facing a significant economic crisis, as inflation continues to rise, presenting a significant threat to the national economy and its citizens. The latest reports indicate that inflation has reached a staggering level, creating instability and uncertainty for both businesses and consumers alike.
Inflation, as measured by the Consumer Price Index (CPI), rose to 4.2% in October 2021. This was the highest level in over a decade, with rising energy costs and supply chain disruptions being major contributing factors. The surge in global demand, combined with persistent disruptions caused by the ongoing COVID-19 pandemic, has created a perfect storm leading to this worrying situation.
The consequences of such high inflation have far-reaching implications for various sectors of the economy. Firstly, consumers are feeling the squeeze as the cost of everyday goods and services rise. Prices of basic necessities such as food, utilities, and transportation have surged, leaving households with less disposable income and reducing their purchasing power. This is particularly concerning for low-income families who struggle to make ends meet under normal circumstances.
The business sector is also grappling with the effects of inflation. Rising production costs, driven by soaring prices of raw materials, pose significant challenges for businesses of all sizes. As businesses are forced to bear higher costs, some may pass on these price increases to consumers, further exacerbating the pressure on households. Others may have to absorb the rising costs, which can eat into their profitability, potentially leading to layoffs or reduced investment in expansion and innovation.
Additionally, inflation erodes the value of money and savings. With prices skyrocketing, the purchasing power of the pound diminishes. Savers are particularly affected as their hard-earned money loses value. This dampens consumer confidence, impedes spending, and hinders economic growth. Furthermore, it poses a threat to future retirement plans as pension savings fail to keep pace with rising costs.
The Bank of England, responsible for managing monetary policy, is under immense pressure to address this alarming situation. While central banks around the world had implemented accommodative measures in response to the pandemic, including low interest rates and quantitative easing, the challenge now lies in managing inflation while avoiding further economic disruption. Striking the right balance is crucial to protect the economy from spiraling out of control.
To curb inflation, the Bank of England may consider raising interest rates. This would make borrowing more expensive and potentially cool down consumer spending, reducing demand-pull inflation. However, it could also dampen investment and economic growth. It’s a delicate dance, where policymakers must carefully assess the risks and make informed decisions to steer the economy towards stability.
If inflation persists at such high levels, it is likely to have prolonged effects on the UK economy. Consumers will continue to face financial strain, businesses may struggle to remain competitive, and economic growth will be hampered. The government must take proactive measures to support businesses, protect vulnerable citizens, and restore economic stability. This may include targeted subsidies, investment in critical sectors, and measures to alleviate supply chain disruptions.
In conclusion, the UK economy is facing a grave threat as inflation reaches alarming levels. The impact is felt by households, businesses, and savers alike. It is essential for the government and the Bank of England to work hand in hand to enact policies that strike a delicate balance between curbing inflation and supporting economic growth. Only through decisive and strategic action can the UK economy recover from this troubling period and pave the way for a more stable and prosperous future.
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Not sure I agree that raising interests earlier would have stopped inflation from rising that much as you have said in other videos the inflation seems to be coming from increases in rents / mortgages and electric and gas along with food inflation. I don't think any of those in the duopoly in Westminster are prepared to make radical changes that would actually prevent further inflation, mass house building, renationalisation of private land (considering it makes up over 60% of the country compared to under 15% of the green belt.) Nationalisation of utilities, services and education. Having watched a few of your videos now I haven't heard you genuinely offer any alternatives other than fiddling around the edges, although I have enjoyed and agreed with most of the content. There seems to be lots of Youtubers who are great at identifying problems with the economy and country less so offering genuine change.
What a great channel. Can cry, laugh and learn while watching the same video!
Spasibo!
There's no outrage about the food prices because the small group of people who own the media don't care about poor people struggling to buy food it's not sexy enough for them. More money is being made from fake outrage than tackling real-world problems.
There are people that understand things. And know how to fix it. They are your engineers. And then there are politicians that their survival skill is to bullshit and back stab their way to a position that hides if Darwin had his way,they are the ones that should be at the bottom of the heap.
Please explain how monthly inflation is not calculated as compounded inflation.most people get a pay raise once a year. Bread does not seem to go up from £1 to £1.10 in. The first month and next month £1.22 next month at inflation monthly at 10% for example .
Do you think UK would bring a citizenship based taxation?
Bailey should be jailed and BoE dissolved.
11% peak. FFS what planet is he and ONS on, from what I see in my and others bills it's been more like 25-30. I know of NO bill that has gone up by less than 10. Utter garbage
As for last 30 yr model again garbage as this include the exceptional globalisation and industrialisation of china is importing cheap good, no idea of home and foreign grown inflation.
As for food prices, here is just one little idea – stop building on farmland to build houses/warehouse and reclaim derelict brown land !!!!!!
a month ago you said economy is recovering
Incompetent or deliberate…methinks a little of both
This is defo your forte for content, exposing what's actually going on – keep it up mate.
Thank you
Wonderful news, thanks.
More updates on UK economy please ✌️
energy companies. payed for my tesla stocks lol . especially XOM lol
Bailey was always going to be a nightmare.
I completely agree on the ineptitude of BoE to predict and act. However, using interest rates alone to deal with this round of inflation is equivalent of using a screwdriver to hammer in a nail….it’s not the right tool for the job. Inflation is also being caused by exodus of workers from the work pool, driving salary increases, by a lack of workers caused by an exodus of EU migrants as a result of Brexit. By massive increases of bringing goods into the U.K. due to Brexit red tape, delays and bureaucracy. By greedflation and corporations milking big profits (BP etc). So…..BoE is being used as a scapegoat for an absolute fundamental failure of government to put in place wide ranging policies that deal with all these disparate elements and….which interest rates will have zero impact on.
Sasha dropping truth bombs! Bank of England is so incompetent!
At last! Another Brit who feels the same passion as me! How are the public not on the streets protesting? This is my second video I have watched of yours, blown away. Fantastic work mate! 🙂
It's been that way ever sence we where coned in to going into that thin cald the E U
Thank you for covering the UK and not just the US
This is so true, but typical, why they continue to keep such incompetent clowns around!
You could blame Brexit if inflation was confined to the UK however it's not.
Inflation will continue as the Eco-loons stop new investment in fossil fuels.
The public are largely to blame as they readily supported Lockdowns and the sanctions against Russia.
Are you still bullish on Fiver stock Sasha?
Certainly! I understand that living expenses and taxes can take up a significant portion of one's income in the UK, which can limit how far that income can go. Even 100k doesn't get you very far and the dream of retiring early is starting to seem like a fairy tale. I have roughly $200,000 in 401(k) that I need to grow quickly. Please leave a comment if you can help.
Totally agree on everything was said! Thank you!
The fact these guys can sit there in 2023 and talk like this, unchallenged, while at times trying not to laugh tells you everything you need to know.
Hi Sasha, if you don't mind, I'd like to ask a question unrelated to this video. How does dual listing of a company on different exchanges relate to that particular company's fundamentals? For instance does one need to examine the fundamentals of the company separately for each of the listings on different exchanges? Or basically it doesn't matter? Say, one can buy stocks of the same company in HKLX and LSE without any concerns as to where it is listed. I'd appreciate any thoughts. Cheers,V
the headlines will focus on negative news, whether it's declining economic growth, geopolitical upheaval, cultural and legal turmoil, or some combination of all three. I listened to a podcast of someone that grew his reserve from $120k to almost $460k during this Red season
Hold the phuckinphone … the same Sasha that once associated himself with Tomer/Tom is dumbfounded by this?
sasha this inflation cant be fake, every pub around me charges 1.50 for a game of pool now!
Alarm bells are still not ringing, an economy totally based on the service industry/debt/credit and now nobody can afford to do anything, buy anything or spend any money. The whole economy is about to crash, unemployment is about to skyrocket.
Sacha, still a legend. Shocking stuff from BoE…apparently speaking eloquently means a) you think you know what you are doing, b) others think you know what you're doing and c) you actually don't give a shit because you have a silver Spoon lodged so far up your arse it's better to hold face and blame countries that TUI or Jet2 fly to and the weather….Great video, beers soon.
You're exactly right, Thanks..
These incompetent clowns just almost make things up with posh accents to justify their privileges, it's corruption.
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Hi Sasha can you confirm that Wise are protected by the FSCS ensuring your money is protected and insured up to the regulatory amount or is this a riskier play?
UK needs to start doing changes for UK people and leave the toxic american politics alone. sorry…. but i really dont understand why we need to toe their line when things are soooo bad here at home? why do we need to spend money on wars and have trade wars at this time?