'It's not about Brexit' Remoaners mocked as economist shuts down link to surging inflation

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'It's not about Brexit' Remoaners mocked as economist shuts down link to surging inflation

Pensioner says rise is ‘not sufficient’ during cost of living crisisThe squeeze on households tightened last month as rising food and fuel prices s

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Pensioner says rise is ‘not sufficient’ during cost of living crisis

The squeeze on households tightened last month as rising food and fuel prices sent inflation to a 30-year high. The Office for National Statistics (ONS) said Consumer Prices Index inflation rose seven percent in the year to March, up from 6.2 percent in February.

The rise sparked questions as to whether or not Brexit has played a part in pushing up prices.

But Julian Jessop, an independent economist and Economics Fellow at the Institute of Economic Affairs, said in a tweet: “I see the usual suspects are still trying to make the rise in #inflation about #Brexit…”

Mr Jessop shared a chart comparing March CPI inflation between EU members states, the US and UK.

It shows that while the UK has hit seven percent, in the Euro area inflation is nudging eight percent.

Inflation

Inflation has hit a 30 year high (Image: Getty)

Man shopping in a supermarket while on a budget

A man shops in a supermarket in the north of England (Image: Getty)

Germany, Luxembourg, Greece, the US, Belgium, Spain and The Netherlands have higher inflation than Britain.

The Netherlands alone has an inflation figure of almost 12 percent, according to the chart which uses data issued by the ONS, Eurostat and BLS.

Spain recorded an inflation figure of 9.8 percent in March, according to its Instituo Nacional de Estadistica.

Mr Jessop’s comment comes as prominent Remainer Alastair Campbell mocked in a tweet: “And just remember as the debate about inflation unfolds that nothing has anything to do with Brexit.”

Fellow Twitter user JerryBuzzKill hit back, saying: “US have higher inflation than us today! Is that Brexit too??

READ MORE ABOUT A DRIVER’S WARNING TO FOSSIL FUEL ACTIVISTS

Sunak

Chancellor Rishi Sunak (Image: Getty)

Journalist, author, and former Downing Street Director of Communications Alastair Campbell

Journalist, author, and former Downing Street Director of Communications Alastair Campbell (Image: Getty)

Another Twitter user, adbalfour, in response to Mr Jessop’s tweet, chimed in: “Didn’t you know? Everything’s about Brexit. Like my bus being late this morning”.

And CcpMurder tweeted: “If you think this has anything to do with Brexit you should just stop talking and delete your Twitter 2bh”.

Analysts agree that COVID-19 has hit global supply chains with a combination of pent-up demand and delays to shipping as factories around the world grapple lockdowns and worker absences.

This has led to prices rising, in particular for raw materials. Food prices have also risen.

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A timeline of the energy price cap (Image: Express)

On the latest inflation figure, Chancellor Rishi Sunak said in a statement: “We’re seeing rising costs caused by global pressures in our supply chains and energy markets which could be exacerbated further by Russian aggression in Ukraine.”

He added the Government would provide £22 billion in support this financial year and is helping people into work.

The UK’s figure does not take into account the average 54 percent hike in energy bills which hit about 22 million households at the beginning of April.

Inflation was once more at the highest point since March 1992, when it stood at 7.1 percent.

A Reuters poll last week showed economists expect eurozone inflation, which hit 7.5 percent in March, to peak during this quarter.

 view of The Royal Exchange and Bank of England in the City of London

A view of The Royal Exchange and Bank of England in the City of London (Image: Getty)

The Bank of England has predicted UK inflation could peak at about eight percent in April as new energy prices are factored in.

Mr Jessop, commenting on the inflation data, said: “The further rise in UK inflation to seven percent in March is a textbook example of too much money chasing too few goods and services. Most explanations focus on the individual prices that are rising the most, rather than looking at this bigger picture.

“This mistake helps to explain why inflation has consistently been higher than almost everyone had expected, including the Bank of England, which has ignored the monetary drivers of inflation for many years.

“The long period of very loose monetary policy, both in the UK and elsewhere, means that inflation is likely to remain high for the rest of this year.”

He added that inflation is now widely spread across the economy, urging the Government to do more to protect the most vulnerable from the cost of living crisis.

Mr Jessop said: “The recent slowdown in UK broad money growth is encouraging and does suggest that inflation will drop back sharply next year.

“However, the policy of quantitative easing has created a large overhang of excess money that will take some time to unwind.

“The Bank of England therefore needs to get serious about returning interest rates to more sustainable levels and withdrawing more of the extraordinary monetary stimulus that has allowed inflation to take off.”

He called for a more credible approach to monetary policy to help get inflation back down over the medium term.



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