Could We Be Nearing Peak Inflation?

August 31, 2022

It seems as though we are trapped in a never ending spiral of bad news at the moment, with continuous headlines about soaring food and energy prices, and rising interest rates. However, Sky News reports that there may be some cause for hope on the horizon, even as inflation soars to the highest level for 40 years. 

The news outlet reports that a number of commodities which shot up in price after Russia’s invasion of Ukraine are now beginning to see their prices fall again. Both countries are major exporters of basic commodities such as grain and sunflower oils, and the disrupted supply chains sent prices soaring. 

It was inevitable that supermarkets would eventually have to pass on the price increases to customers, which is why staples such as bread, pasta, and edible oils have become so much more expensive. However, now the prices are starting to ease off, in some cases falling near to pre-invasion levels. 

The price of major commodities, such as oil, copper, and iron ore, which also spiked in March, are also beginning to fall. Shipping and transport cost are now lower too, and over the coming weeks, these lower prices should filter down to the consumer.  

However, it is still likely inflation will continue to rise, hitting a peak of 13% in October, before starting to fall. Further interest rate rises are also on the cards. 

Lord Stuart Rose, chairman of Asda and a Conservative peer, called for more action to help those most in need. He told BBC Radio 4’s Today programme: “We’ve been very, very slow in recognising this train coming down the tunnel. It’s now here, and it’s not about to run us over, it’s [already] run quite a lot of people over.” 

 The government commented that they were considering a range of options to support households, which will be announced when the new Prime Minister is appointed.  

If you would like some advice from adverse credit mortgage brokers in the UK, please get in touch today. 

Your home may be repossessed if you do not keep up with your mortgage repayments. 

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