Yesterday, the Bank of England increased interest rates as expected from 4.0% to 4.25% pa following the Federal Reserve increasing rates from a range of 4.5% to 4.75%pa to 4.75% to 5.0% pa. Last week, the EU Central Bank increased rates from 3.0% to 3.5% pa.
Globally, inflation is stubborn with food supply issues and logistics costs increasing due to industrial action and poor weather hitting vegetable and salad production in Europe. US inflation is lower at 6.04% pa due to having a tougher approach to interest rates, but the UK headline inflation rate increased to 10.4% pa and Europe’s inflation rate is awaited only falling 0.1% in February to 8.5% pa. That said, when you look at the European continent, including the UK and EU, you will note that there are only 4 nations in European Economic Area that have inflation below that of the USA, so we have a long way to go:
Country |
Last Inflation Rate % |
Previous Rate % |
When |
Lebanon |
190.00 |
124.00 |
Feb-23 |
Venezuela |
156.00 |
157.00 |
Oct-22 |
Syria |
139.00 |
134.00 |
Aug-20 |
Argentina |
102.00 |
98.80 |
Feb-23 |
Zimbabwe |
87.60 |
92.30 |
Mar-23 |
Sudan |
63.30 |
83.60 |
Feb-23 |
Suriname |
55.50 |
54.56 |
Jan-23 |
Turkey |
55.18 |
57.68 |
Feb-23 |
Iran |
53.40 |
51.30 |
Feb-23 |
Ghana |
52.80 |
53.60 |
Feb-23 |
Sri Lanka |
50.60 |
51.70 |
Feb-23 |
Haiti |
49.30 |
48.30 |
Jan-23 |
Cuba |
44.50 |
42.08 |
Feb-23 |
Laos |
41.26 |
40.30 |
Feb-23 |
Sierra Leone |
38.48 |
37.09 |
Jan-23 |
Ethiopia |
32.00 |
33.90 |
Feb-23 |
Egypt |
31.90 |
25.80 |
Feb-23 |
Pakistan |
31.50 |
27.60 |
Feb-23 |
South Sudan |
31.30 |
14.40 |
Feb-23 |
Rwanda |
30.30 |
31.10 |
Feb-23 |
Burundi |
27.99 |
28.62 |
Feb-23 |
Malawi |
26.70 |
25.90 |
Feb-23 |
Moldova |
25.90 |
27.30 |
Feb-23 |
Sao Tome and Principe |
25.50 |
25.20 |
Jan-23 |
Hungary |
25.40 |
25.70 |
Feb-23 |
Ukraine |
24.90 |
26.00 |
Feb-23 |
Nigeria |
21.91 |
21.82 |
Feb-23 |
Kazakhstan |
21.30 |
20.70 |
Feb-23 |
Comoros |
20.90 |
17.70 |
Dec-22 |
Latvia |
20.30 |
21.50 |
Feb-23 |
Myanmar |
19.55 |
19.42 |
Jul-22 |
Lithuania |
18.70 |
20.00 |
Feb-23 |
Poland |
18.40 |
16.60 |
Feb-23 |
Estonia |
17.60 |
18.60 |
Feb-23 |
Turkmenistan |
17.50 |
14.95 |
Dec-22 |
Czech Republic |
16.70 |
17.50 |
Feb-23 |
Macedonia |
16.70 |
17.10 |
Feb-23 |
Congo |
16.28 |
14.06 |
Jan-23 |
Kyrgyzstan |
16.20 |
15.30 |
Feb-23 |
Serbia |
16.10 |
15.80 |
Feb-23 |
Bulgaria |
16.00 |
16.70 |
Feb-23 |
Romania |
15.52 |
15.07 |
Feb-23 |
Slovakia |
15.40 |
15.20 |
Feb-23 |
Montenegro |
15.10 |
16.20 |
Feb-23 |
Bosnia and Herzegovina |
14.10 |
14.80 |
Jan-23 |
Azerbaijan |
14.10 |
13.60 |
Feb-23 |
Gambia |
13.64 |
13.14 |
Feb-23 |
Colombia |
13.28 |
13.25 |
Feb-23 |
Barbados |
12.30 |
11.30 |
Dec-22 |
Mongolia |
12.20 |
12.30 |
Feb-23 |
Uzbekistan |
12.20 |
12.20 |
Feb-23 |
Croatia |
12.00 |
12.70 |
Feb-23 |
Sweden |
12.00 |
11.70 |
Feb-23 |
Chile |
11.90 |
12.30 |
Feb-23 |
Belarus |
11.70 |
12.00 |
Feb-23 |
Angola |
11.54 |
12.55 |
Feb-23 |
Madagascar |
11.44 |
10.88 |
Jan-23 |
Nicaragua |
11.10 |
10.92 |
Feb-23 |
Mauritius |
11.00 |
11.80 |
Feb-23 |
Russia |
11.00 |
11.80 |
Feb-23 |
Austria |
10.90 |
11.20 |
Feb-23 |
Senegal |
10.60 |
12.80 |
Jan-23 |
Kosovo |
10.50 |
12.10 |
Feb-23 |
Tunisia |
10.40 |
10.20 |
Feb-23 |
United Kingdom |
10.40 |
10.10 |
Feb-23 |
Mozambique |
10.30 |
9.78 |
Feb-23 |
Iceland |
10.20 |
9.90 |
Feb-23 |
Morocco |
10.10 |
8.90 |
Feb-23 |
Faroe Islands |
10.10 |
8.80 |
Dec-22 |
Guatemala |
9.92 |
9.69 |
Feb-23 |
European Union |
9.90 |
10.00 |
Feb-23 |
Honduras |
9.80 |
8.93 |
Feb-23 |
Guinea Bissau |
9.70 |
9.50 |
Jan-23 |
Zambia |
9.60 |
9.40 |
Feb-23 |
Slovenia |
9.30 |
10.30 |
Feb-23 |
Algeria |
9.30 |
9.30 |
Jan-23 |
Uganda |
9.20 |
10.40 |
Feb-23 |
Kenya |
9.20 |
9.00 |
Feb-23 |
Liberia |
9.12 |
7.23 |
Oct-22 |
Italy |
9.10 |
10.00 |
Feb-23 |
Solomon Islands |
9.10 |
9.60 |
Dec-22 |
Botswana |
9.10 |
9.30 |
Feb-23 |
Mauritania |
9.00 |
10.30 |
Feb-23 |
Finland |
8.80 |
8.40 |
Feb-23 |
Bangladesh |
8.78 |
8.57 |
Feb-23 |
Germany |
8.70 |
8.70 |
Feb-23 |
Trinidad and Tobago |
8.70 |
8.00 |
Dec-22 |
Peru |
8.65 |
8.66 |
Feb-23 |
Philippines |
8.60 |
8.70 |
Feb-23 |
Euro Area |
8.50 |
8.60 |
Feb-23 |
Chad |
8.50 |
8.30 |
Jan-23 |
Ireland |
8.50 |
7.80 |
Feb-23 |
Guinea |
8.32 |
8.60 |
Jan-23 |
Portugal |
8.20 |
8.40 |
Feb-23 |
Central African Republic |
8.10 |
10.40 |
Feb-23 |
Georgia |
8.10 |
9.40 |
Feb-23 |
Armenia |
8.10 |
8.10 |
Feb-23 |
Netherlands |
8.00 |
7.60 |
Feb-23 |
Nepal |
7.88 |
7.26 |
Feb-23 |
Jamaica |
7.80 |
8.10 |
Feb-23 |
Australia |
7.80 |
7.30 |
Dec-22 |
Mexico |
7.62 |
7.91 |
Feb-23 |
Denmark |
7.60 |
7.70 |
Feb-23 |
Uruguay |
7.55 |
8.05 |
Feb-23 |
Lesotho |
7.40 |
6.80 |
Feb-23 |
Cameroon |
7.32 |
8.18 |
Dec-22 |
Cape Verde |
7.30 |
7.40 |
Feb-23 |
New Zealand |
7.20 |
7.20 |
Dec-22 |
Namibia |
7.20 |
7.00 |
Feb-23 |
Iraq |
7.16 |
4.31 |
Jan-23 |
Albania |
7.10 |
7.20 |
Feb-23 |
South Africa |
7.00 |
6.90 |
Feb-23 |
Malta |
7.00 |
6.80 |
Feb-23 |
Paraguay |
6.90 |
7.80 |
Feb-23 |
El Salvador |
6.82 |
7.03 |
Feb-23 |
East Timor |
6.70 |
7.30 |
Nov-22 |
Cyprus |
6.70 |
7.11 |
Feb-23 |
Belgium |
6.62 |
8.05 |
Feb-23 |
Belize |
6.60 |
6.70 |
Jan-23 |
Aruba |
6.60 |
5.70 |
Jan-23 |
Guyana |
6.59 |
6.40 |
Feb-23 |
India |
6.44 |
6.52 |
Feb-23 |
Dominican Republic |
6.40 |
7.24 |
Feb-23 |
Norway |
6.30 |
7.00 |
Feb-23 |
Singapore |
6.30 |
6.60 |
Feb-23 |
France |
6.30 |
6.00 |
Feb-23 |
Papua New Guinea |
6.25 |
5.47 |
Sep-22 |
Burkina Faso |
6.10 |
8.20 |
Feb-23 |
Mali |
6.10 |
7.70 |
Jan-23 |
Greece |
6.10 |
7.00 |
Feb-23 |
United States |
6.00 |
6.40 |
Feb-23 |
Spain |
6.00 |
5.90 |
Feb-23 |
Cayman Islands |
5.90 |
9.20 |
Dec-22 |
Puerto Rico |
5.80 |
6.00 |
Jan-23 |
Swaziland |
5.60 |
5.80 |
Dec-22 |
Brazil |
5.60 |
5.77 |
Feb-23 |
Costa Rica |
5.58 |
7.65 |
Feb-23 |
Indonesia |
5.47 |
5.28 |
Feb-23 |
Gabon |
5.40 |
5.60 |
Dec-22 |
Somalia |
5.40 |
5.60 |
Feb-23 |
Togo |
5.20 |
7.40 |
Feb-23 |
Canada |
5.20 |
5.90 |
Feb-23 |
Israel |
5.20 |
5.40 |
Feb-23 |
Bahamas |
4.80 |
5.48 |
Jan-23 |
South Korea |
4.80 |
5.20 |
Feb-23 |
Ivory Coast |
4.80 |
5.10 |
Jan-23 |
Tanzania |
4.80 |
4.90 |
Feb-23 |
United Arab Emirates |
4.58 |
6.77 |
Jan-23 |
Tajikistan |
4.50 |
5.20 |
Nov-22 |
Eritrea |
4.50 |
4.80 |
Dec-21 |
Qatar |
4.41 |
4.20 |
Feb-23 |
Bhutan |
4.33 |
4.44 |
Jan-23 |
Vietnam |
4.31 |
4.89 |
Feb-23 |
Luxembourg |
4.30 |
4.80 |
Feb-23 |
Jordan |
4.25 |
3.78 |
Feb-23 |
Bermuda |
4.10 |
3.80 |
Dec-22 |
Djibouti |
4.10 |
3.50 |
Jan-23 |
Libya |
4.10 |
2.90 |
Dec-22 |
Palestine |
4.03 |
3.73 |
Feb-23 |
Maldives |
3.99 |
3.42 |
Jan-23 |
Thailand |
3.79 |
5.02 |
Feb-23 |
Malaysia |
3.70 |
3.70 |
Feb-23 |
Afghanistan |
3.60 |
5.20 |
Jan-23 |
Vanuatu |
3.60 |
2.70 |
Jun-22 |
New Caledonia |
3.40 |
4.30 |
Feb-23 |
Liechtenstein |
3.40 |
3.30 |
Feb-23 |
Switzerland |
3.40 |
3.30 |
Feb-23 |
Japan |
3.30 |
4.30 |
Feb-23 |
Kuwait |
3.22 |
3.31 |
Feb-23 |
Saudi Arabia |
3.00 |
3.40 |
Feb-23 |
Cambodia |
2.90 |
3.20 |
Dec-22 |
Ecuador |
2.90 |
3.12 |
Feb-23 |
Equatorial Guinea |
2.90 |
3.00 |
Dec-21 |
Bolivia |
2.57 |
3.14 |
Feb-23 |
Taiwan |
2.43 |
3.04 |
Feb-23 |
Panama |
2.04 |
2.71 |
Feb-23 |
Oman |
1.90 |
1.90 |
Feb-23 |
Hong Kong |
1.70 |
2.40 |
Feb-23 |
Fiji |
1.50 |
2.50 |
Feb-23 |
Brunei |
1.40 |
3.30 |
Jan-23 |
Benin |
1.20 |
1.30 |
Feb-23 |
Seychelles |
1.13 |
2.39 |
Feb-23 |
Niger |
1.10 |
2.00 |
Feb-23 |
China |
1.00 |
2.10 |
Feb-23 |
Bahrain |
0.80 |
3.60 |
Jan-23 |
Macau |
0.77 |
0.77 |
Feb-23 |
Source: https://tradingeconomics.com |
Headline Inflation
When you see doom and gloom headlines that UK inflation is the highest in the G7 nations, take heart that Italy and Germany are not that much below us and only France is closer to US inflation but when looking at a wider EU: Hungary 25.4% pa, Poland 18.4% pa, Czech Republic 16.70% pa. In fact, Austria, Bulgaria, Croatia, Estonia, Latvia, Lithuania, Romania, Slovakia and Sweden all have higher inflation that UK. That’s half of EU countries have much higher inflation than UK, 5 nations are close to UK and 7 are closer to US inflation. The EU’s battle with inflation will be much more complex that the UK or USA.
Comment
Clearly Brexit pains and our reliance on imported goods with a weak £ are keeping UK inflation higher than G7 nations but a stronger £ as interest rates increase will make imports cheaper. We believe Thursday’s interest rate increase, whilst painful for all in terms of borrowing costs, is likely to be one of the last and inflation will fall throughout summer to ease interest rates down.
‘Keep hauling’, better times will come.