21st May, 2022
British Prime Minister Boris Johnson said he would have to use fiscal firepower to help people through the cost of living crisis over the coming months.
“In the months ahead we are going to have to do what we did before, we’re going to use our fiscal firepower that we built up, that we have, to help,” Johnson said during a speech in Wales.
“We’re going to put our arms around the British people again as we did during COVID,” he said.
Britons are facing a cost of living crisis as renewed COVID lockdowns in China and Russia’s invasion of Ukraine have disrupted supply chains.
This has triggered skyrocketing inflation.
They are also reeling from an April 54% increase in energy prices – which the BoE thinks will go up another 40% in October – as well as higher taxes.
Retail sales in the three months to April fell 0.3%, after a 0.7% drop in March.
Compared with a year ago, sales volumes were 4.9% lower, marking the biggest annual drop since January 2021.
Earlier on Friday, Britain’s longest-running gauge of consumer confidence, the GfK survey, fell to its lowest since records began in 1974. read more
British consumers were hit last month by a double whammy of surging household energy costs and higher taxes, and data published this week showed inflation hit a 40-year high of 9.0%.
The Bank of England thinks inflation will climb above 10% later this year.
“So far, the conflicting signals coming from the data are consistent with our call that the UK will stagnate in Q2,” said economists from Berenberg Bank.
Sterling was little changed against the dollar after the data.
The Office for National Statistics said in its latest report that food store sales rose by 2.9% in April, largely driven by strong sales of alcohol, tobacco and ‘sweet treats’.