Brexit: Bruno Bonnell says he can see ‘no success’ in UK economy
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According to the consumer price index released by the Bureau of Labor Statistics, the index rose by 6.2 percent in October from a year ago. This increase has been at the fastest rate since 1990, prompting fears that a global crash could be inbound.
The figures from September to October also saw a significant rise.
In September, index levels were at 5.4 percent, before rising to 6.2 percent in October.
Certain areas are facing the impact of rising consumer prices across the country.
Rents and other shelter-related costs have steadily risen over the last few months, while other sectors have moderated.
Senior Federal Reserve officials – including chair Jay Powell and Richard Clarida, the vice-chair – both argued that the current rises in consumer prices will return to normal as labour markets adjust following the pandemic.
But Mr Powell and Mr Clarida have said that as the situation is being monitored, the central bank is ready to use anything necessary to help out should things get far worse.
These fears come as the Office for Budget Responsibility (OBR) announced that the UK may need to pay out £5.4billion extra in debt interest next year.
OBR warns if inflation in the UK remained as it is, then taxpayers would need to pay £39.9billion to cover the cost of the country’s debt.
Economist Paul Mortimer-Lee told the Guardian: “A squeeze on real incomes for workers and those on Universal Credit will slow economic growth next year, with the adverse effects on consumption offset by lower savings.
“Meanwhile, inflation is set to peak around five percent, forcing a reluctant Bank of England to raise interest rates, albeit grudgingly.
“Unemployment should settle in a narrow range around 4 ¼ percent. The risks are skewed to the upside on inflation and the downside on growth.”
Jagjit Chadha, director of the National Institute of Economic and Social Research, has warned that the supply problems will continue, and the impact of Brexit will only worsen these.
He said: “This is because our exit from the European Union has acted to reduce the pool of labour, contributed to lower levels of firm investment than might otherwise have been the case, and led to some contraction in the size of our traded sector.”
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Germany also heard a dire warning as the projections for their economy were outlined.
A report published by the German Council of Economic Experts on Wednesday predicts there would be a mere 2.7 percent rise in the coming year.
Joachim Lang, General Manager of the Federation of German Industries (BDI) said: “The report is an alarm signal for German politics.
“Tensions in supply chains have weakened production and export.”
Mr Lang warned: “The coming months promise little improvement.
“The lack of raw materials, chips and intermediate products, as well as congestion at ports and insufficient container capacities, will continue to affect the industry.
“For an upswing to resume, politics and business must work together to overcome these tensions.”
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