Why UK Inflation Is So High and What It Means for Interest Rates

While a post-pandemic burst of inflation has abated across much of the developed world, the UK is still stuck with the highest price growth among big Western economies.

Granted, consumer price inflation is now well below where it was in late 2022, when it maxed out at 11.1%. That’s after the Bank of England aggressively ramped up benchmark interest rates from almost zero in late 2021 to 5.25% in 2023, sucking money out of the economy by hammering the purchasing power of borrowers.