UK Faces Highest G7 Inflation Rate Until At Least 2024, Moody's Warns

British Inflation Predicted to Reach 3.9% in 2024 Despite Rising Interest Rates

Moody's, the ratings agency, has issued a warning that the United Kingdom will continue to experience the highest inflation rate among G7 nations until at least the end of 2024. Despite a notable increase in interest rates, British consumer prices are expected to rise by a further 3.9% next year, a level similar to Italy and significantly higher than other major advanced economies.

As of now, the UK already holds the highest inflation rate among G7 countries, standing at 6.8%. Throughout 2023, it is projected to remain substantially elevated in comparison to its peer nations, averaging at 7.8%.

Moody's attributes the persistent inflationary pressures to various factors. While inflation is decreasing in both advanced and emerging economies, many households have spent a significant portion of their pandemic-related savings. However, Moody's cautions that this situation could still change, as food and energy prices have been on the rise since June, and tight labor markets are contributing to wage increases.