Latest news with #costOfLiving
Yahoo
6 hours ago
- Business
- Yahoo
Rice prices double in Japan as inflation accelerates
The price of rice doubled in Japan in the 12 months to May, data showed Friday, as an acceleration in inflation piled fresh pressure on Prime Minister Shigeru Ishiba ahead of key elections next month. Polls for parliament's upper house are crucial for Ishiba after public support for his administration tumbled to its lowest level since he took office in October, partly because of frustration over the cost of living. One of the main sources of anger has been the surging cost of the food staple, which has rocketed for months owing to shortages caused by a variety of reasons including supply chain snarls. The price of the grain rocketed 101 percent year-on-year in May, having jumped 98.4 percent in April and more than 92.5 percent in March. That helped push core inflation, which excludes volatile fresh food prices, to a forecast-topping 3.7 percent -- its highest level since January 2023 -- and up from 3.5 percent in April. The rice crisis has led the government to take the rare step of releasing its emergency stockpile since February, which it usually only ever did during disasters. But rice is not the only thing pushing inflation up: electricity bills jumped 11.3 percent in May, while gas fees rose 5.4 percent, according to Friday's data. Excluding energy and fresh food, consumer prices rose 3.3 percent, compared with April's 3.0 percent. "Since I'm a temp worker, my salaries have remained stagnant for years, and I see no sign of change in the years ahead," Chika Ohara, 52, told AFP on a Tokyo street. "But prices are going up nonetheless and I feel the impact," she said. - Cash handouts - To help households combat the cost of living, Ishiba has pledged cash handouts of 20,000 yen ($139) for every citizen, and twice as much for children, ahead of the election. The 68-year-old leader's coalition was deprived of a majority in the powerful lower house in October as voters vented their anger at rising prices and political scandals. It was the worst election result in 15 years for the Liberal Democratic Party (LDP), which has governed Japan almost continuously since 1955. The Bank of Japan has been tightening monetary policy since last year as inflation crept up but worries about the impact of US tariffs on the world's number four economy has forced it to take a slower approach. Economists predicted a growth slowdown ahead. Earlier this week it kept interest rates unchanged and said it would taper its purchase of government bonds at a slower pace. "Policy flip-flops and delayed pass-through from producers to consumers mean inflation will slow only gradually in the coming months," said Stefan Angrick of Moody's Analytics. "This will keep a sustained pickup in real wages out of reach, and with it a meaningful uptick in consumption." Factors behind the rice shortages include an intensely hot and dry summer two years ago that damaged harvests nationwide. Since then some traders have been hoarding rice in a bid to boost their profits down the line, experts say. The issue was made worse by panic-buying last year prompted by a government warning about a potential "megaquake" that did not strike. Intensifying fighting between Iran and Israel was also adding upward pressure on energy prices, posing a further risk to the Japanese economy. hih-kaf-tmo/dan
Daily Mail
a day ago
- Business
- Daily Mail
BREAKING NEWS Bank of England holds interest rates at 4.25% amid fears Middle East crisis and rising food inflation could increase cost-of-living further
The Bank of England kept UK interest rates at 4.25 per cent today amid rising food inflation and the threat of surging oil prices pushing up the cost of living. Most economists had predicted that the Bank of England's Monetary Policy Committee (MPC) would opt to keep rates on hold following its latest meeting. The MPC has voted to cut rates at every other meeting since it started easing borrowing costs last August, from a peak of 5.25 per cent. This has been possible while the rate of UK inflation has been steadily falling from the highs reached in 2023, at the peak of the cost-of-living crisis. Interest rates are used as a tool to put a lid on unruly inflation, in line with the Bank's task of keeping the rate of Consumer Prices Index (CPI) at 2 per cent. However, rising food prices have been putting pressure on overall inflation recently, with the latest data from the Office for National Statistics (ONS) showing food and non-alcoholic drink prices rose by 4.4 per cent in the year to May. This was the highest level in more than a year, with items like ice cream, coffee, cheese and meat spiking last month. Chocolate prices soared by nearly 18 per cent annually, a record jump for the confectionery. The overall CPI rate came in at 3.4 per cent in May, slightly higher than the 3.3 per cent rate most economists had been expecting. Monica George Michail, associate economist for the National Institute of Economic and Social Research (Niesr) said the institute was forecasting inflation to remain above 3 per cent for the rest of the year amid 'persistent wage growth and the inflationary effects from higher Government spending'. Speaking ahead of the interest rates announcement today, she added: 'Additionally, the current tensions in the Middle East are causing greater economic uncertainty. 'We therefore expect the Bank of England to keep rates on hold this Thursday and implement just one further cut this year'. Sandra Horsfield, an economist for Investec, said the Bank of England would likely have been encouraged by services inflation dropping to 4.7 per cent in May, from 5.4 per cent in April. This could indicate that higher employer national insurance contributions, which rose in April, have not been passed onto consumers to the extent that policymakers had feared, she said. But Ms Horsfield said 'other uncertainties remain, not least with respect to US tariffs and the indirect impact this will have on UK firms'. 'The risk to energy prices has clearly intensified and moved up the agenda given developments in the Middle East,' she added.
Daily Mail
a day ago
- Business
- Daily Mail
Now it's Labour's turn to face the music when global events turn sour: ALEX BRUMMER
Yesterday's claim by Chancellor Rachel Reeves that Labour's number one mission is to 'put more money in the pockets of working people' does not stand up to scrutiny. Prices and the cost of living are rising, not falling – and there's no end in sight. Consumer price inflation was 3.4 per cent in May amid surging food prices, which were mainly a consequence of Reeves's tax-raising Budget in October. Producers and supermarkets have passed on the rocketing costs of employment, energy and business rates to consumers – costs which are hurting the very working people the Chancellor has pledged to help. April's inflation was fractionally higher at 3.5 per cent, but no one should assume that the worst is behind us. The conflagration in the Middle East has caused a sharp spike in market prices of oil, and that increase will quickly feed through to the petrol pumps. In the event of a blockage to the Strait of Hormuz – the Iranian coastline forms one side of this narrow but vital waterway for Arabian Gulf oil and natural gas supplies – the world could face a shock so debilitating it would end any progress in bringing down inflation. And if anyone believed that the Government's self-inflicted price rises – the inflation that came through higher energy and water bills, and stamp duty on home purchases – were at an end, they should think again. The impact that Angela Rayner's employment rights legislation will have on costs is not yet known. The Deputy Prime Minister's Bill is still trundling through the House of Commons, but it is certain to have a negative effect on the high street, where the cost of using part-time workers will increase sharply. It is striking that, in presenting the Spending Review last week, the Chancellor took credit for the four cuts in the Bank of England's key interest rate since Labour came to office. The reality is that, by loading £40billion of new taxes on business and citizens, she has raised the cost of living and made it more difficult for the Bank of England's interest rate committee – which is divided on the issue – to step up the pace of rate cuts from the present 4.25 per cent. It is all the more frustrating that several indicators used by the Bank have started to cool. The cost of services, for example, has dropped from 5.4 per cent in April to 4.7 per cent in May. That improvement, sadly, has been offset by the tax and spend agenda. Labour was keen to blame the Tories for allowing inflation to jump to 11 per cent in 2022. That, of course, was in the aftermath of Russia's invasion of Ukraine, when energy prices rocketed. Now it is Rachel Reeves's turn to face the turmoil of events beyond her control, this time in the Middle East.
The Sun
2 days ago
- Business
- The Sun
Tories warn of tax rises as inflation remains far above two per cent target
TORIES warned of tax rises yesterday as inflation remained far above the two per cent target. Shadow Chancellor Mel Stride said that Labour's tax on jobs and increased borrowing is 'killing growth' and 'making everyday essentials more expensive." 2 It came as inflation cooled slightly to 3.4 per cent, a higher rate than the 3.3 per cent analysts expected. Cupboard items like sugar, jam and chocolate as well as ice cream saw the biggest monthly price hikes, while meat costs also rose. Average prices at the pump dropped, while rail and coach travel costs were also pulling down on the overall rate of inflation. Chancellor Rachel Reeves insisted there was 'more to do' to bring down inflation and help with the cost of living. She said: 'We took the necessary choices to stabilise the public finances and get inflation under control after the double-digit increases we saw under the previous government. "But we know there's more to do.' Mr Stride said: 'This morning's news that inflation remains well above the 2% target is deeply worrying for families.' Labour was waging a punitive 'war on aspiration' that would devastate the economy. The self-made billionaire said Rachel Reeves' tax hikes and business red tape would drive talent out of Britain and strangle growth. In a withering verdict of the Chancellor's policies, he wrote in The Sun: ' Labour is out to destroy. 'Those who aspire to create wealth and jobs, and those who grow our food, will all be punished. They hate those who set out to try, with an animus.' Growth forecast SLASHED in Spring Statement - sparking fears of MORE tax rises 2
The Independent
2 days ago
- Business
- The Independent
UK inflation to edge higher if oil prices push up energy costs, experts warn
UK inflation was higher than expected last month as economists raised concerns that escalating conflict in the Middle East could push up the cost of living. Experts said that if global oil and gas prices continue to soar then this could drive energy costs higher. The latest figures from the Office for National Statistics (ONS) showed the rate of UK Consumer Prices Index (CPI) was 3.4% in May – slightly higher than the 3.3% forecast by most economists. It came in lower than the 3.5% recorded for April – however, the ONS has since said that that figure was incorrect due to an error in how it initially calculated price rises, and it should have been 3.4%. Inflation remaining elevated was largely due to food prices rising in shops, with items like chocolate, jam and meat spiking last month. Food and non-alcoholic drink prices rose by 4.4% in the year to May – the highest level in more than a year. The end of Easter sales on furniture and homeware is also thought to have contributed to prices jumping across the category between and April and May. On the other hand, air fares, petrol and diesel prices fell between April and May, helping to balance out the overall inflation rate. Experts have said that inflation is set to remain elevated over the coming months, particularly if global oil prices continue to spike. Laith Khalaf, head of investment analysis at AJ Bell, said: 'The escalation of conflict in the Middle East has bumped up the oil price, which will put upward pressure on inflation if sustained.' The price of Brent crude oil has risen to a four-month high in recent days since Israel launched an attack on Iran's nuclear programme and conflict between the two countries has escalated. It has stoked fears over possible disruption to the supply of crude in the Middle East – with Iran a significant exporter of oil, and the potential for oil and gas passing through the Strait of Hormuz to be obstructed. Higher energy prices – which have not been factored into the latest ONS data – threaten to push up inflation in the UK. Rob Wood, chief UK economist for Pantheon Macroeconomics, said he was expecting inflation to 'bounce around these rates for the rest of the year' and to peak at 3.6% in September when energy prices spike. This peak could rise to as much as 3.8% if oil and natural gas prices continue to soar, he said. Matt Swannell, chief economic advisor to the EY Item Club, said: 'Headline inflation is likely to edge upwards over the next few months, and the increase could be more pronounced if the recent rise in Brent crude oil prices is sustained. 'But we expect inflation to cool from October, as the positive contribution from the energy category wanes.' Experts also said that the Bank of England was facing a difficult task in setting interest rates amid price volatility in global markets. Most economists expect the Bank to keep UK rates the same, at 4.25%, when it makes the next announcement on Thursday. Mr Wood said policymakers are likely to 'proceed cautiously' with just one more cut to rates this year, expected in November, amid 'sticky' inflation. Elsewhere, the ONS's data showed the statisticians preferred measure of inflation, Consumer Prices Index including owner occupiers' housing (CPI H), fell to 4% in May from 4.1% in April. Meanwhile, the Retail Prices Index (RPI) rate of inflation fell to 4.3% from 4.5%. However, the ONS said April's RPI figure was also 0.1 percentage points too high, and should have been 4.4%. This happened because of an error that meant the effect of vehicle tax hikes in April was overstated in the data collected for the month. The ONS said it would not be revising the official published figures, in line with its policy which only carries out revisions in exceptional circumstances.
