The Bank of England has come in for fierce criticism from a senior economic commentator for allowing inflation to “run out of control”, after “disappointing” new figures showed that prices for essential items, like food, remain at eye-watering levels. New figures out today from the Office for National Statistics (ONS) show that overall inflation in the year to April is down to 8.7 percent from 10.1 percent in the year to March.
However, the price of food, is still increasing at more than 19 percent.
Chancellor Jeremy Hunt admitted food prices are “still rising too fast”.
He said: “Today’s fall in inflation… shows we’re on the right track but there is no room for complacency. It’s tough right now but things will get better”.
Commenting on the ONS figures, Julian Jessop, Economics Fellow at free market think tank the Institute of Economic Affairs, said: “Today’s disappointing numbers show how difficult it is to bring inflation back down once central banks have allowed it to run out of control.”
He added: “The fall in headline inflation in April, from 10.1 per cent to 8.7 per cent, is obviously welcome but entirely due to the smaller increase in domestic energy bills, which we already knew about.
“Other elements of inflation remain sticky, including food prices and the core measure (excluding food and energy) which jumped sharply.”
The Brexit-backing economist also noted: “There was at least some more evidence today that pipeline cost pressures are easing, including producer price inflation in the food sector.
“May’s inflation data should therefore be better. But the next set of inflation figures will have to be much better to prevent interest rates from rising further.”
Shadow chancellor Rachel Reeves took aim at the Government’s handling of spiralling costs, saying: “As bills keep surging, families will be worried food prices and the cost of other essentials are still increasing.
“They will be asking why this Tory government still refuses to properly tackle this cost of living crisis, and why they won’t bring in a proper windfall tax on the enormous profits of oil and gas giants.”
The 44-year-old Leeds West MP added: “The reality is that never have people paid so much in taxes and got so little in return.
“Our economy is constantly lurching from crisis to crisis, when we should be protecting family finances and building our national economic security here in Britain.
“Labour’s mission to secure the highest sustained growth in the G7 will make families across every part of our country better off”.
