Households in the United Kingdom will face the highest increase in living costs of any major economy this year.
According to the Organisation for Economic Cooperation and Development, inflation is expected to average 6.9% because it takes longer to fall here than in any other G7 country.
One explanation is the influence of wholesale energy prices, because the UK is still significantly reliant on imports despite our North Sea oil and gas deposits.
Critics accuse successive governments of failing to invest North Sea production taxes in Britain’s future energy needs, especially storage, which we now chronically lack.
The impact of labour shortages on wages has also contributed to greater inflation. However, the OECD highlighted the impact of rising food prices, which is now the largest worry for millions of people.
According to recent figures from the Office for National Statistics, food and soft drink inflation was 19% in April, a near 45-year high. Imports are a major issue once again.
For example, practically all seafood and more than 90% of maize goods on grocery shelves come from outside the EU or the US. More than 70% of our vegetable oil is imported, compared to 44% in the EU, and 64% of our butter is imported.
As a result, we are more vulnerable to global price increases and currency changes.
Brexit has also been mentioned as a possible influence. According to academics at the London School of Economics, UK families have spent an extra £7 billion to pay the increased cost of trade barriers on food imports since Boris Johnson led the UK out of the EU.
“Whatever anyone says, Brexit is one issue that has pushed prices up,” a senior industry official said. And other post-Brexit developments this year could exacerbate import concerns.”
It may also be claimed that our reliance on cheap imports has not encouraged corporations to invest in the UK, including more support for our farmers.