‘Trump’s Not Taking Your Calls’: Starmer Cornered Over Lack Of Contact With President

Posted on 10/04/2025 by Boris Clair

Keir Starmer was cornered by a journalist today over his lack of contact with Donald Trump since the US president unveiled his new trade tariffs.

The president hit the UK with a baseline 10% tax on imports heading into the US on April 2.

That came on top of his 25% global levy on cars, steel and aluminium products.

While the 10% tax was much less than many other trading partners – the EU was slapped with a 20% tariff – it was still more than some, such as Russia, who got away without any new tariffs at all.

Then Trump U-turned this week and announced most tariffs would be reduced to 10%, aside from China – taking away any trade advantage the president had handed to the UK had over competitors altogether.

So ITV News’ Carl Dinnen asked the prime minister today in Doncaster: “Have you spoken to President Trump since he put a 10% tariffs on all goods coming from here to the United States?”

Starmer replied: “My team are in contact with the President’s team every day.”

“So you haven’t spoken to him?” Dinnen pushed.

The PM hit back: “Well, I’ve spoken to him frequently both on the phone and I’ve met him a number of times.”

The reporter said: “Yeah but not since he put the tariffs on.”

Starmer replied: “The teams are discussing every day, and seeking to do what we can to mitigate the tariffs –”

Dinnen cut in: “With respect prime minister, it feels like he’s not taking your calls. Is that what’s happening?”

The prime minister pushed back: “No, not at all, you have to understand that the UK and the US – our teams talk all of the time, whether that’s on defence, on security, on intelligence, and on trade, on a deal.

“That is constantly going on. That’s what you would expect of two very close allies. But at the same time, I’m clear this is a change that, in my view, isn’t temporary, and therefore we’ve got to do the hard graft of making sure we are turbocharging our own economy.”

He listed the work he’s been focused on in the UK and his conversations with other world leaders to “lower trade barriers”.

“My focus every day has to be on what’s in the national interest in the United Kingdom,” the prime minister said.

Starmer has been phoning plenty of other world leaders since Trump’s “Liberation Day” announcement on April 2.

That includes the Crown Prince of Saudi Arabia Mohammed bin Salman, the prime minister of Singapore Lawrence Wong, the prime minister of Italy Giorgia Meloni and the prime minister of Australia Anthony Albanese.

He has also spoken to President of the European Commission Ursula von der Leyen, German Chancellor Olaf Scholz and leader of the German Christian Democratic Union party Friedrich Merz.

But, despite Trump’s apparent silence towards the UK, Starmer has avoided criticising the president directly, only admitting that he is “disappointed” by the decision.

The UK is pushing to secure a trade deal with the States, and hoping it could mean Britain secures some tariff exemptions, too.

But the US president has been mocking world leaders for pursuing trade deals, saying they are “calling us up, kissing my arse” to negotiate.

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‘With respect prime minister, it feels like Trump’s not taking your calls…’@carldinnen grills Starmer on whether he’s spoken to Donald Trump since he put 10% tariffs on the UK

The PM insists ‘my team are in contact with the President’s team every day’ pic.twitter.com/ZsABY10wkw

— ITVPolitics (@ITVNewsPolitics) April 10, 2025

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‘With respect prime minister, it feels like Trump’s not taking your calls…’@carldinnen grills Starmer on whether he’s spoken to Donald Trump since he put 10% tariffs on the UK

The PM insists ‘my team are in contact with the President’s team every day’ pic.twitter.com/ZsABY10wkw

— ITVPolitics (@ITVNewsPolitics) April 10, 2025

Keir Starmer Warns Trump Tariff Fallout Won’t Be Fixed With ‘Any’ Trade Deal

Posted on 09/04/2025 by Boris Clair

Keir Starmer has warned that it is not “enough” for the UK to secure “any” US trade deal in a bid to get reduced tariffs, as the global economic turmoil rumbles on.

Donald Trump announced global tariffs on foreign goods going into the US on April 2.

The UK was hit with only the “base rate” 10% tax on its imports, but it came on top of the global levy of 25% on cars and steel products.

Still, the Labour government have avoided publicly condemning the dramatic move from the White House.

Starmer is hoping to secure a trade deal with the US before May 1, which – ideally – would see the UK secure exemptions to the tariffs in exchange for some British concessions.

If the deal is not across the line by the end of the month, Starmer has warned he may look to issue reciprocal tariffs on the States.

Speaking on Wednesday, ITV News’ Robert Peston asked the prime minister just what he wanted out of the tariff chaos.

He said: “Do we have to have 10% forever, you know, you’re obviously keen to get the 25% on cars and steel down, but is the 10% permanent?”

“Look, I don’t know,” Starmer replied.

“We are negotiating and we hope to improve the situation, but what I mean by this is that simply thinking that any change in the rates or any deals is going to be enough, to my mind is wrong.

“Because just as we’ve done with defence and security, where we’ve recognised it’s a changing world, we’ve got to step up and act differently.

“In that case with defence spend, coordinating better across Europe, so too with trade and the economy.”

While emphasising this is not a “passing phase” the world is going through, he also refused to call on Trump to reduce the 104% levy on China.

He said: “I’m not going to engage in diplomacy through the media, but I mean I’ve been clear that throughout that a trade war is in nobody’s interest.”

Peston tried again, and asked: “For America, this looks like a Liz Truss-style financial crisis.

“The price that America pays to borrow is soaring and we’ve been infected.

“I don’t know if you’ve been told this, but the government’s borrowing costs are now the highest since 1998. He’s harming us. Surely you’ve got to say to him, ‘stop, change course’.”

But Starmer still refused to make any public statement against Trump’s economic policy.

He also told ITV News he would not follow Truss’s example of “putting to one side rules and institutions, checks and balances” by changing the government’s own fiscal rules.

When Labour got into office, chancellor Rachel Reeves promised she would not borrow for day-to-day spending.

Despite the growing pressure on the struggling British economy, he said these are still “ironclad” ideas.

He added: “Those fiscal rules are foundational to the stability that we brought to our economy, so we go ahead in that calm way, obviously we’re talking to the US to see what we can do to mitigate the situation.”

Starmer said it was important to be “calm” and “pragmatic”, focus on “turbocharging” the UK economy and “talking to other world leaders about lowering trade barriers across the world”.

He rejected any suggestion the public spending may have to be cut again or taxes may have to rise in the autumn as a result of the struggling markets.

“I don’t accept the proposition that it’s inevitable things will happen in six months’ time,” the PM said.

BBC Question Time Guest Says Concerns Around Rachel Reeves’ CV Are A ‘Distraction’

Posted on 14/02/2025 by Boris Clair

A BBC Question Time guest dubbed the furore around Rachel Reeves’ career a “distraction” from the current “catastrophic situation” we are in.

The chancellor is facing intense scrutiny after the BBC reported her LinkedIn account exaggerated how long she had worked at Bank of England.

Reeves was also allegedly the subject of an expenses probe when she was the senior manager at Halifax Bank of Scotland in the late 2000s, which the chancellor has since said she had no knowledge of.

Prime minister Keir Starmer has stood by his chancellor, telling the media that these issues were from “many years ago”.

But last night, BBC Question Time host Fiona Bruce asked the panel: “Is it ever OK to put things on a CV which are not true?”

Journalist George Monbiot replied: “No, it’s not OK but actually it’s a pretty trivial issue.

“I know it’s going to be kicked around by the media because the media loves this kind of gossip.”

“It’s not the first time [the LinkedIn profile] had to be amended,” Bruce cut in. “And this is the chancellor, the second most important person [in the government].”

“I accept all that, but actually it’s a distraction from the pretty catastrophic situation in which which we find ourselves,” he replied. “We have a chancellor and indeed a prime minister who have no vision at all apart from this thing called ‘growth’, GDP growth.”

Labour have repeatedly pledged to put economic growth at the heart of their government, but Monbiot argued it should not be used as a measure of national welfare.

He said in some ways there is a “direct contradiction” between growth and our welfare, adding: “We can see this in exactly what Rachel Reeves is doing.”

He also criticised Reeves’ decision to allow a third runway to be built at Heathrow Airport and for her “horrible attack” on regulations.

“To make matters worse, [she is] turning on people who care about the natural world,” Monbiot said.

Alluding to the accusations around Reeves’ CV, he suggested that “the big deception is that GDP could be seen as a measure of our wellbeing.”

Education minister Jacqui Smith defended the chancellor on the same programme last night, pointing out that Reeves corrected her LinkedIn account when the issue was raised.

“She is probably the best qualified chancellor that we’ve had for a considerable period,” Smith said. “She is a trained economist, which is – given some of the chaos we’ve had from chancellors and budgets in the recent past – is actually something really really important.”

Reeves has often pointed to her past in the Bank of England to bolster her credentials, and repeatedly claimed to have spent the best part of a decade there.

But she left the Bank nine months earlier than she started on her LinkedIn profile, which means she spent five and a half years there.

A spokesperson has since told reporters that the mistake was due to an administrative error from her team and that the chancellor didn’t see it before it was published. The profile has now been updated.

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“It’s a distraction from the pretty catastrophic situation in which we find ourselves”

George Monbiot says the debate around Rachel Reeves’ online CV is “trivial” compared to her lack of “vision” towards the UK economy#bbcqt pic.twitter.com/TLmrRCOvbK

— BBC Question Time (@bbcquestiontime) February 13, 2025

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“It’s a distraction from the pretty catastrophic situation in which we find ourselves”

George Monbiot says the debate around Rachel Reeves’ online CV is “trivial” compared to her lack of “vision” towards the UK economy#bbcqt pic.twitter.com/TLmrRCOvbK

— BBC Question Time (@bbcquestiontime) February 13, 2025

Trevor Phillips Accuses Rachel Reeves Of ‘Sounding Like’ Liz-Truss In Brutal Takedown

Posted on 26/01/2025 by Boris Clair

Presenter Trevor Phillips compared Rachel Reeves to Liz Truss today after her recent decisions on non-doms and benefits during a scathing interview.

The chancellor watered down plans to make wealthy foreigners pay more tax on their overseas earnings this week, despite previously promising to crack down on this “non-dom” loophole.

She has also promised to crack down on benefit fraud this week.

So the Sky News host put a quote to her, which read: “We must break down the barriers to growth built up in our system over decades.

“Decisions take too long, Burdens on business are too high.

“Infrastructure projects get delayed for years, and years and years. As a result, we have seen economic growth choked off.”

“What you’ve been saying this morning sounds very like that,” Phillips said – before revealing it was a comment from former PM Truss, who famously crashed the economy in 2022 with £45bn of unfunded tax cuts.

But Reeves said Truss and other Tory PMs “did not do the practical things which were necessary to grow our economy”.

Phillips’ remark came after he called out Reeves for going to “Davos, the capitalist shin-wag” and listening to “millionaires” by changing her promise to close the non-dom tax loophole.

The chancellor just replied that if you make Britain your home, you should pay your taxes here, “and under Labour you will”.

But Phillips pointed out that she has changed the amount of money she was going to charge non-doms.

However, Reeves argued she was only changing the scheme so non-doms have to pay lower rates of tax on the overseas income for the next three years.

“What we are doing is making it easier for people to bring money in from overseas to the UK, without facing punitive tax rates,” she said, saying Labour are still removing the non-dom status from the UK tax system.

Phillips said he was not “nit-picking,” and pointed out that Reeves imposed a £40bn of tax hikes with her autumn Budget, reduced the winter fuel allowance for pensioners and reduced inheritance tax relief for farmers.

He said: “You can see that this week, people watching you in Davos amongst all these millionaires, and you saying, ‘well I’ve listened to this community’, are wondering why you can’t listen to the farmers.”

Reeves replied she had to raise significant funds in the Budget and “people would never forgive me if we lost control of public finances in the way that Liz Truss did”.

Reeves also added that her non-dom changes had not cost the public anything.

But Phillips said it seemed as though “non-doms get sympathy and people on welfare get tough love.”

Reeves just said it was about tackling fraud, “If people aren’t entitled to benefits, they shouldn’t be getting them.”

Phillips also skewered the chancellor over her attempt to be more positive with the UK, following months of pessimism over the state of the British finances.

He said: “When you said we needed to be more positive with our outlook, more like Donald Trump, did you forget that America’s GDP was growing at the end of last year while ours was just flat? He’s got something to boast about.”

Reeves said the UK has “loads” to boast about, although she admitted we have not had 3% growth “for a long time”.

“We need to go further and faster in delivering that growth, exploring the massive opportunities that we have as a country,” she said, saying everyone needs to “be championing Britain”.

Phillips hit back: “In the autumn, you and the prime minister were channelling Eeyore. How come Tigger has suddenly turned up, what’s changed?”

Reeves deflected and just said the IMF revised up the predictions for the UK economy, to become the “fastest growing major economy in Europe”.

‘Politically Suicidal’: John McDonnell Warns Reeves Spending Cuts Could Cause Recession

Posted on 14/01/2025 by Boris Clair

John McDonnell has warned Rachel Reeves that any public spending cuts would be “politically suicidal” and risk tipping the UK into recession.

The former shadow chancellor said Labour should instead increase taxes on the wealthy.

Keir Starmer yesterday said the government will be “ruthless” in sticking to its fiscal rules as he repeatedly refused to rule out further spending cuts.

Treasury sources have also told HuffPost UK that the chancellor is determined to have an “iron grip” on the public finances.

Reeves finds herself under intense pressure as the value of the pound falls, government borrowing costs soar and inflation goes up.

On Radio 4′s Today programme this morning, McDonnell said any cuts to Whitehall budgets would be counter-productive.

He said: “There is obviously a problem. There is turbulence in the international markets and we’ve just got to see those through.

“The way you do that is you don’t turn to cuts. Not only would that be politically suicidal, it would undermine the political support upon which Labour got elected.

“In addition to that you would be taking demand out of the economy and you would be looking at, in doing that, turning a crisis into a recession.

“So I think you just need to see through the turbulence that is in the markets and in this instance we need to look to the Bank of England to intervene if necessary.”

McDonnell said Labour was wrong to rule out putting up income tax on the rich, or putting up corporation tax.

And he said Reform UK stood to benefit if cuts led to more voter disillusionment with the political process.

He added: “When we were preparing for government, we were looking to the bank of England to see us through the turbulence.

“There are two groups of people who make judgments on an incoming government. One is the international money markets, but the most important people are the electorate.

“I think what has to happen here is the electorate have to be protected, otherwise I’m afraid we’re looking at a level of disillusionment which then turns people towards Reform and I think that would be a disaster for the country.

“We have to look to what the response from the electorate would be to another round of cuts.”

McDonnell also warned that more cuts to the welfare budget, as Reeves is thought to be considering, would “force more into poverty and cause real hardship”.

He added: “When you’re in this situation, those with the broadest shoulders should carry the heaviest burden. I would look at increasing income tax on the wealthiest, but I would look at an honest discussion on how we tax wealth in our country.

“That way you can overcome these problems that we have in the markets because you’ll have a solid tax base.”

Liz Truss Has 1 Truly Outlandish Idea To Fix UK’s Economic Turmoil

Posted on 13/01/2025 by Boris Clair

Liz Truss has just advised chancellor Rachel Reeves to follow her mini-Budget from 2022 to get the UK out of its current economic mess.

Government borrowing costs have soared since Labour got into power in July, while inflation crept up to 2.6% in the 12 months to November and the value of the pound has dropped.

The economy stagnated over the second half of 2024 too, suggesting the UK is rather a long way off Labour’s number one mission of higher growth.

Naturally, the government’s critics have rallied together to slam Reeves’ efforts to boost the country’s finances – including none other than Truss, who only lasted 49 days in office after crashing the economy.

Responding to reports that Reeves is feeling “very depressed” about the UK’s economic outlook, the former PM wrote on X that “the way out” was to “cut taxes, cut regulation, get fracking, limit the benefits bill”.

She then posted the front cover of “The Growth Plan 2022” – better known as the mini-Budget, which was so disastrous Truss was kicked out of office.

Her plan for £45bn of unfunded tax cuts sent the market into turmoil and the pound plummeting, so much so the Bank of England had to step in with the UK hours away from total financial meltdown.

She even became the centre of social media mockery after a viral stunt asked which would last longer: Truss in office or a lettuce head with a short shelf life (the lettuce won).

But, Truss – who also lost her seat in the general election – has actually been blaming the Bank of England for the crisis ever since.

Last week, she even issued a cease and desist letter to Keir Starmer demanding the PM stop saying she “crashed the economy”, and calling it “false and defamatory”.

This caused “Liz Truss crashed the economy” to start trending on social media.

Labour has repeatedly attributed their “tough” financial decisions – complete with £40bn of tax rises – to the black hole the Tories (especially Truss) left in the public finances.

And the prime minister’s spokesperson suggested Starmer would not stop pointing the finger at Truss, telling reporters the PM “absolutely stands by” what he has said about his predecessor.

So Truss’ attempt to promote her mini-Budget once again has, of course, sparked quite the reaction online….

‘Worst Of All Worlds’: Fresh Blow For Rachel Reeves As Businesses Make Gloomy Forecast For 2025

Posted on 23/12/2024 by Boris Clair

Rachel Reeves has been dealt yet another blow as businesses warned the UK economy is “headed for the worst of all worlds” in 2025.

A survey by the Confederation of British Industry found firms expected to reduce both output and hiring at the start of the New Year.

They said the chancellor’s decision to hike employers’ National Insurance in the Budget in October was one of the reasons for the slump in confidence.

Meanwhile, the Office for National Statistics revealed this morning that the economy flatlined between July and September – Labour’s first three months in power – having previously said it had grown by 0.1%.

Alpesh Paleja, the CBI’s interim deputy chief economist, said: “There is little festive cheer in our latest surveys, which suggest that the economy is headed for the worst of all worlds – firms expect to reduce both output and hiring, and price growth expectations are getting firmer.

“Businesses continue to cite the impact of measures announced in the Budget – particularly the rise in employer NICs – exacerbating an already tepid demand environment.

“As we head into 2025, firms are looking to the government to boost confidence and to give them a reason to invest, whether that’s long overdue moves to reform the apprenticeship levy, supporting the health of the workforce through increased occupational health incentives or a reform of business rates.

“In the longer term, businesses will be looking to the industrial strategy to provide the stability and certainty which can unlock innovation and investment – and provide that much-needed growth for the economy which can deliver prosperity for firms and households alike.”

The CBI survey is yet more grim news for Reeves and prime minister Keir Starmer, who have pledged that Labour will have the fastest growing economy in the G7 by the time of the next election.

Lasy week the ONS said gross domestic product (GDP) actually fell by 0.1% in October, just as it did in September, raising fears that the UK could be heading for recession in 2025.

Meanwhile, inflation increased to 2.6%, and the Bank of England governor Andrew Bailey said “uncertainty” caused by the Budget meant interest rates will stay higher for longer.

Shadow business secretary Andrew Griffith said: “Since taking office, the Chancellor has made this country a hostile climate for aspiration, for investment and for growth. Rachel Reeves’s tax-raising spree and trash-talking her economic inheritance are literally killing businesses and jobs.

“If there is a recession – and based on these CBI expectations that seems increasingly likely – it will be one made in Downing Street.

“Labour needs to urgently change course before the damage they are doing becomes even greater.”

Responding to the ONS revising down economic growth between July and September, Reeves said: “The challenge we face to fix our economy and properly fund our public finances after 15 years of neglect is huge. But this is only fuelling our fire to deliver for working people.”

Mishal Husain Slams Tories’ ‘Economic Competence’ In Spat With Jeremy Hunt

Posted on 10/05/2024 by Boris Clair

Mishal Husain did not let Jeremy Hunt boast about the UK’s economic growth today and reminded him of the disasters the country has faced under the Tories.

While the chancellor was celebrating the news from the ONS that the UK is officially out of recession, the Today programme host kicked off the interview by saying: “It’s not a strong recovery is it?

“Some people would call it anaemic. You’re not calling it strong are you?

“That’s not what it is. The economy has barely grown over the last two years.”

Hunt claimed over the last quarter, the UK had the joint-highest growth in the G7– and then blamed slow growth on the Bank of England’s high interest rates.

Husain hit back: “You’re portraying yourself as the people in whose hands the economy is safe, and yet many voters, particularly those who are perhaps finding themselves re-mortgaging this month on higher rates and seeing the facts that fixed rate mortgage deals have been edging up – and others – will be remembering what happened under Liz Truss and that mini-budget.

“And they’ll say: ‘How can you possibly, after the events of the last two and half years, portray yourself as the party of economy competence?’”

Sunak’s predecessor unveiled £45bn of unfunded tax cuts in her mini-budget in 2022, causing the pound to plummet.

“Well, there were some mistakes that were made in that mini-budget and we corrected them within weeks,” the chancellor said.

He also pointed to the energy shock triggered by the Ukraine war and said it was “just wrong” to attribute all price rises to the mini-budget.

“But, it wasn’t economically competent, was it, to do that?” Husain pushed. “And do you accept that it’s fair for voters to go into the next election, remembering that happened under the Conservatives?”

Hunt said the “overall picture” shows that the UK has grown faster than France, Germany, Italy and Japan since the Conservatives took over in 2010.

He also pointed to the IMF’s predictions that the UK would continue to grow faster over the next six years.

He failed to mention that the think tank OECD predicted last week the UK would be the second slowest-growing economy in 2024, and the slowest in 2025.

Hunt maintained that voters support the Conservative Party because “they trust us to take tough and difficult decisions in the long-term interest of the economy”.

“You’re asking us to ignore Liz Truss, aren’t you? To say Liz Truss never happened,” Husain said – which Hunt denied.

Jeremy Hunt’s Claim Tories Always Aim To Lower Taxes Leaves People Pointing Out The Obvious

Posted on 03/03/2024 by Boris Clair

Jeremy Hunt told broadcasters this morning that it is an “eternal truth” that Conservative governments “try to bring the tax burden down” – but not many people agree.

The chancellor was speaking to journalists on Sunday ahead of the unveiling of his Spring Budget later this week, an annual event where the government outlines its plans for taxes and spending.

The pressure is on for Hunt and PM Rishi Sunak as Tories have been calling for more popular policies to soften the general public ahead of the general election later this year.

Hunt refused to reveal any particular policies he has lined up before his announcement on Wednesday – but he did repeatedly suggest that the public can trust the Tories with the economy.

He told Sky News: “I do want to show people in an election year that eternal truth that Labour governments spend more and tax more, Conservative governments spend more wisely and try to bring the tax burden down.”

He echoed this claim on the BBC.

“We’ve been very consistent, that we would only cut taxes in a way that was responsible and prudent,” he said, adding that he would not be announcing any “gimmicks” this week.

But, in the last four years, five different Tory chancellors have pledged to bring taxes down – only for them to rise to a historic level.

In fact, the current tax burden in the UK is the highest since World War 2.

As Labour’s shadow chief secretary to the Treasury, Darren Jones, pointed out: “It is the Tories who have raised taxes to their highest level in 70 years.

“No matter what the chancellor does in the Budget this week, working people will be worse off thanks to 14 years of Tory failure.”

Many on X (formerly Twitter), seemed to agree.

And several users pointed out that the last few years in government have hardly improved the economy – especially after former Tory PM Liz Truss’s disastrous mini-budget sent the markets into a complete spin and as the UK is currently in the middle of a recession…

Jeremy Hunt’s problem is this. Tory rule supposed to be about financial prudence. All they’ve done is rack up debt, spaffed billions on Brexit and their mates, and the Tories who voted for them on the basis of tax cuts have never been taxed so much. The party has lost its USP.

— Tim Walker (@ThatTimWalker) March 3, 2024

Jeremy Hunt, who is on course to raise taxes in the UK to their highest level since the Second World War, tells Sky News that it is an “eternal truth” that Conservative governments “bring the tax burden down.” pic.twitter.com/DxXPgcbWmt

— Adam Bienkov (@AdamBienkov) March 3, 2024

Left: Jeremy Hunt, “Labour govs spend more and tax more, Conservative govs spend more wisely and bring tax burden down”

Right: Sky News, “In the last four years, five chancellors says they want to cut taxes. In reality the opposite has happened. Taxes have been rising to near… pic.twitter.com/bpJOtjhV4W

— Farrukh (@implausibleblog) March 3, 2024

So is @Jeremy_Hunt telling us that we should be greatful that the recession they have thrown us into isn’t as bad as it could be? #bbclaurak

— Harry Eccles (@Heccles94) March 3, 2024

So, Why Exactly Is Inflation Higher In Britain Than In The US And Europe?

Posted on 21/06/2023 by Boris Clair

The UK has an inflation problem. Officials had hoped the rising cost of goods and services would have been brought to heel by now, as soaring energy costs fuelled by the war in Ukraine have cooled.

But, on Wednesday, its downward trajectory stalled and alarm bells started ringing.

The Office for National Statistics said inflation, as measured by the consumer price index, held steady at 8.7 per cent in the year to May. Expectations were that the rate would fall a to 8.4 per cent.

And there was more. Britain’s measure of underlying inflation that excludes volatile items, such as energy and food, took investors by surprise by accelerating for a second month in a row in May, hitting 7.1 per cent, up from 6.8 per cent in April. Higher core inflation is seen as a sign that price growth is more likely to remain persistently high.

UK inflation remains unchanged at 8.7% in May.

Anadolu Agency via Getty Images

It looks certain that the independent Bank of England will raise the cost of borrowing again on Thursday for the 13th month in a row – the only question is whether it’s by 0.25 percentage points, or a symbolic half percentage point to 5%.

Don’t other countries have inflation under control?

Britain’s inflation rate has stayed far above price growth in the US and elsewhere in Europe. Although 8.7% is down from a peak of 11.1% last October, it leaves the UK with the highest inflation rate among the G7 advanced economies. By comparison, inflation stood at 4% in the US and 6.1% across the 20 EU countries that use the euro currency.

Last week, the Federal Reserve – America’s equivalent of the Bank of England – ended a 15-month streak of hiking interest rates, a pause that currently seems highly unlikely in the UK.

The surging cost of food

Britain has had western Europe’s highest rate of inflation for food, with prices up more than 18 per cent over the past year, down only slightly from a recent peak of more than 19 per cent, the highest since 1977.

Freak weather has affected crops around the world, pushing up prices for many countries. But Britain is the world’s third largest net importer of food and drink, according to the Food and Agriculture Organisation of the United Nations – behind only China and Japan – leaving it particularly exposed.

Industry data published on Tuesday showed British grocery inflation eased slightly for the third month in a row in June.

Bank of England governor Andrew Bailey said last month that British food producers may have locked in higher costs than the central bank had anticipated, explaining some of its underestimate of inflation.

Heavy reliance on natural gas

Britain is highly reliant on imported gas to generate electricity, exposing it to the full force of the surge in gas prices last year after Russia’s invasion of Ukraine.

The way Britain regulates energy prices for domestic and business users – it announces changes to maximum tariffs on a quarterly basis – means that international price rises are slower to push up inflation than in many other countries but falls are also slower to feed through into bills for users.

Brexit

Exiting the European Union and its single market at the start of 2021 has started to have an impact. Although an agreement between the UK and the bloc allows largely tariff-free trade in goods, there are barriers to exports and imports in the form of paperwork which have caused delays and higher costs.

Meanwhile, the end of free movement of workers from EU countries has contributed to an acute shortage of staff for many employers, pushing up wages and ultimately prices for consumers.

Bank of England decision-making

Some economists think the Bank, which is tasked with keeping inflation at around 2%, was too slow in starting to raise interest rates and is now playing catch-up.

Its own monetary policy committee rate-setter member, Chaterine Mann, said in February that the Bank should have started raising interest rates earlier (“a greater degree of front-loading” was needed) and is now paying the price.

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