UK recession
UK Inflation and Recession: What's Up? The Surge of Inflation: A Post-Pandemic Reality Inflation Defined: A sustained increase in prices of goods and services, beneficial at 2-3% but harmful at double digits like the UK's 11% post-pandemic. Root Causes: Increased food and energy bills, driven by the pandemic's aftermath and the Russia-Ukraine war. The war's impact on oil prices and food supply chains led to higher costs for essentials like fertilizers and animal feed (cost-push inflation). Consequence: A supply-demand mismatch, pushing prices upward and fueling inflation. : Interest Rates: The Double-Edged Sword Strategy: To combat inflation, the UK raised interest rates from around .3 to 5.25%, aiming to curb the rise in living costs by reducing spending power. Impact on Households: Higher interest rates mean increased mortgage repayments, reducing ability to spend as a lot money is spent on mortgage repayments. (ex. To calculate how a change in interest rat