Written by Christopher J. Wilkinson
RPI inflation reached 7.5 per cent in December 2021, the highest level in thirty years.
The inflation statistics are the latest economic concern for Boris Johnson’s embattled government. Housing costs and fuel prices were the primary causes of the increase, with general cost-push pressures being experienced as global supply lines come under strain from worker absence, delivery delays and material shortages.
The M2 measure of money supply has increased by roughly a quarter since the start of 2020, though this increase has not entirely been reflected in ONS inflation data. Under the National Living Wage award for 2022, only apprentices and 21 to 22-year-olds will see a real increase in living standards this year should high inflation rates persist.
Contrary to claims by the mainstream media, the British economy has not recovered to its pre-pandemic peak with the economic rebound slowing sharply in the third quarter of 2021. The current recession remains the worst in three hundred years. The UK’s balance of payment deficit, a measure of a country’s ability to pay its way in the world, remains abnormally high for recession circumstances.
More enlightening news, however, can be found with employment at 75.5 per cent seasonally adjusted in November, up from 74.6 per cent at the trough of last January. Unemployment fell to 4.1 per cent in November, down from a peak of 5.2 per cent in December 2020; female unemployment remains slightly lower than male unemployment.
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