London: Cost of living in the United Kingdom is continuously rising due surge in the prices of essential commodities. The inflation in the country has jumped to a 41-year high.
In October the Consumer Price Index (CPI) which measures the inflation in a country hit 11.1 percent, the highest since 1981.
The inflation level has beaten the market expectation of 10.7 percent. It even jumped higher than what the Bank of England forecasted.
Why is inflation rising?
One of the major reasons for the rise in inflation is the Russia-Ukraine war. Due to the war, the cost of energy is rising in entire Europe.
Food prices are also increasing due to a drop in the grain supply amid the ongoing war.
Over the last year, the prices of gas and electricity increased by 130 and 66 percent respectively.
Why is high inflation considered bad?
High inflation is always considered bad as it will result in an enormous rise in the prices of essential commodities.
Though the wages of the working people also increase annually, if the inflation percentage is more than the wage rise percentage, it is not good for the economy of the country.
Whenever, there is high inflation, the central bank of the country will try to control it by increasing the interest rate.
Though by increasing the interest rate the central bank can control inflation, sudden hike in the lending rate will impact the overall economy of the country.
High-interest rate will not only slow down the growth of the country but sometimes pushes it towards recession.
