As we’re progressively submerging into the post-pandemic crisis, it has been quite a show, watching long-time cryptocurrencies sceptics suddenly change their minds. This is because crypto is now considered to be one of the ways to avoid inevitable inflation. The publicity has also looked at gold once again, and it looks like its virtues are currently being rediscovered.
It’s obvious that the future of the UK’s (but not only) is being currently a source of worry. What will happen when inflation hits? Jerome Powell, the U.S. Federal Reserve Chairman, has recently commented that we’re currently at an inflexion point. This means, that while we’re still trying to figure out the vaccination program, inflation is being held right around the corner. But eventually, it will come.
The pandemic effects on the UK’s inflation
ONS (Office for National Statistics) has recently informed us that the United Kingdom’s inflation has reached 0.4% in February. It is currently still below 2%, and UK seems to be better-positioned to other countries - the USA for instance.
But let’s go back to the February data. This could be perceived as a slight success, as it was a drop from December’s and January’s rates (0.6% and 0.7% respectively). This was amid easing the CPI rates (Consumer Prices Index). The slight increase at the beginning of the new year was caused by food retailers and household products stores that pushed their prices up and got rid of discounts. Naturally, people stopped spending so much.
Then in February, clothing retailers and the dealers of second-hand cars offered great promotions and propelled the market again. This is where the drop came from. Of course, customers’ behavior isn’t the only factor that influences inflation. The government’s pandemic aid is also a big ‘helper’.
To find out about the specific mechanisms of global inflation and the predictions, visit Disruption Banking piece: https://disruptionbanking.com/2021/04/12/how-did-the-pandemic-affect-inflation-rates-in-the-uk/.