Inflation has gone up to 2.7% today.
This confirms long-held Liberal Democrat warnings about the impact of Brexit, with businesses struggling to contain rising costs and consumer demand being squeezed.
Susan Kramer said:
These worrying levels of inflation show the Brexit squeeze is hitting shopping baskets across the country.
This is the reality of Theresa May and Nigel Farage’s extreme Brexit agenda: higher prices in the shops, the cost of holidays going up and less money for our schools and NHS.
A brighter future is possible. We will give people a choice over their future through a referendum, so they can reject a bad Brexit deal and choose to remain in Europe.
Willie Rennie underlined this point:
This rise in inflation shows the cost of Brexit.
The public are seeing the cost of a weekly shop go up; the cost of holidays going up and this is before it really hits.
Once the dramatic consequences of Brexit become clear, the Liberal Democrats say that the public should have the final on whether Theresa May’s Brexit deal is right for them in a Brexit deal referendum.
If Theresa May brings a bad Brexit deal then we should be able to reject it and have the option to remain in Europe.
* Caron Lindsay is Editor of Liberal Democrat Voice and blogs at Caron's Musings
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14 Comments
B-B-B-Baby, you just ain’t seen n-n-n-nothing yet
Here’s something that your never gonna forget
B-B-B-Baby, you just ain’t seen n-n-n-nothing yet
sing along my brave Brexiteers because you just ain’t seen n-n-n-nothing yet.
What is the right level of inflation for Lib Dems?
@Peter Watson: A level working people can afford. The inflation rate has to be taken in context with wage increases that, as I commented on the previous post, the CIPD forecasts to be just 1% over the coming year.
@Peter Watson – A good question.
As inflation (a constant upward trend in prices) was post gold standard ie. second half 20th century concept. I have my doubts about the received wisdom that a level of inflation is good.
To me, many of the arguments boil down to where money is allowed to accumulate. In a simplistic closed system, inflation is effectively created when prices go up before wages are increased and thus permitting a seller to put more money in their pocket, but at the expense of workers.
What level of inflation would give most Brexiters cause to think again?
How deep do Brexiters have to dig before they realise they are in a hole?
Peter,
It isn’t the level of inflation that is the problem, it is the fact it is well above the rate of wage inflation. We are getting poorer and Brexit is to blame. A sad but undeniable truth.
Martin,
The Brexiteers don’t think of it as a hole, they think of it as a trade route to Australia.
What is the right level of inflation for Lib Dems?
What a senseless answer in an attempt to diminish. Inflation eats away people’s living standards, it makes people poorer, especially today, when individuals in the main are not getting anything like a 2.7 % pay raise. Just take those who have done the right thing and saved a little, their returns also are nowhere near 2.7%. To top it all the Bank of England is wrong again, 2.7% shouldn’t of happened until the final quarter. What are we looking at then, 4%. We are all going to get poorer, but than signing up to a blank piece of paper does have its perils.
“What is the right level of inflation for Lib Dems?”
I am no economist so might be barking up the wrong tree here, but …
The main reason I ask is that if inflation is calculated on a 12 month rolling average and the increase is due largely to the initial fall in the value of the pound after the EU Referendum, then that effect might be dropping away shortly and a new Tory government could claim that its “strong and stable” leadership has successfully fixed what Lib Dems identified as “the dramatic consequences of Brexit”. Getting hung up on this month’s number might be less helpful than demonstrating to voters how it is impacting on their daily lives and it risks letting the Tories off the hook if in a few months they can point to a “better” number.
Also, the BBC reports that “The main reason [for the increase in the rate of inflation this month] was higher air fares, which rose because of the later date of Easter this year compared with 2016.”, which does not sound like the sort of life-and-death issue over which the Lib Dems could be attacking the Tories.
Making imports more expensive means people are more likely to turn to British products. So, that’s the sort of thing those who voted Leave voted for. Congratulations to them for getting what they want.
Inflation when were in the common market in the 1970s was has high as 20%. When it became the EU in 92 it was in the teens with the added bonus of eye watering interest rates. It was also as high as this for much of the coalition years. Inflation goes up and down, except housing coz no one will let that drop. Historically 2.7% is not actually very high, although most people would probably like it to be lower.
Glenn: Yes but people have got used to low inflation. When we had high inflation before they were compensated by huge pay increases which is unlikely to be the case now so there might be a lot of angry voters next time around – hopefully.
nvelope2003
When we had high inflation before they were compensated by huge pay increases which is unlikely to be the case now
Well, I think for public service workers it should be, with whatever tax increases are necessary to pay for it. If anyone moans about that just say “It’s a consequence of Brexit, and Brexit means Brexit”.
Nvelope2003 and Matthew.
2.7 is not high inflation. It’s simply a bit above target level.