- A tight labour market and fixed-rate mortgages are key culprits
- But there is less evidence for ‘greedflation’ or the impact of quantiative easing
Bond yields are at hit the highest level since 2008, surpassing the panic caused by Liz Truss's chaotic mini-Budget – and all because Britain is struggling to contain its inflation.
The latest figures showing UK inflation has remained ‘stuck’ at 8.7 per cent which has worried traders, who now expect the Bank of England (BoE) to raise interest rates as high as 6 per cent in order to tame rising prices. Their panic is somewhat justified. Last week, BoE governor Andrew Bailey told the House of Lords that while the Bank thinks inflation will come down it is "going to take a lot longer”. By international standards, the UK’s inflation rate is eye-wateringly high, as the table shows. But why is UK inflation proving so sticky?