Why is uk inflation so high

A Reuters poll of economists last week suggested the BoE will raise borrowing costs by end, earlier than previously thought, while markets price in a first increase by May and a further rise in December. A year later, the absence of these discounts meant restaurant prices comprised more than half of the 1. A body called the Office for National Statistics ONS notes the prices of hundreds of everyday items, from cinema tickets to smart-speakers.

These items are called the "basket of goods", and they're being constantly updated. For instance, this year reflecting the pandemic , the ONS added hand sanitiser and men's loungewear bottoms, but took out sandwiches bought in staff restaurants.

The ONS releases its measure of inflation each month - showing how much these prices have risen since the same date last year. The inflation rate is used by government bodies to decide a whole range of matters, from how much pensions should rise, to the price of train fares.

It's keenly watched by economists too. They see inflation as a sign of what's going on in the economy. A bit of inflation is considered to be a good sign. If prices were falling then people might delay buying non-essential items in the hope of getting them cheaper. But if prices are rising too sharply, it's seen as a sign that the economy is running into difficulties. If inflation rises quickly, the Bank of England will tackle it by raising interest rates.

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