100 years history of inflation

Over the past 100 years, the United Kingdom has experienced varying levels of inflation.

In the early part of the 20th century, the UK experienced relatively low and stable inflation rates. However, following World War II, inflation started to increase gradually. In the 1970s, the country faced significant inflationary pressures, with inflation rates reaching double-digit levels. This period was characterized by a combination of factors, including rising oil prices, wage-price spirals, and expansionary fiscal policies.

In response to the high inflation of the 1970s, the UK government pursued a policy of monetarism in the 1980s, aiming to control inflation by reducing the growth rate of the money supply. This policy led to a period of declining inflation rates, although they remained elevated by historical standards.

During the 1990s and early 2000s, the UK experienced a period of relatively low inflation, with rates generally ranging between 1% and 4%. The Bank of England gained independence in 1997 and adopted an inflation targeting framework, aiming to keep inflation at a target rate of 2%. This framework has guided monetary policy decisions since then.

In the wake of the global financial crisis in 2008, the UK, like many other countries, faced an economic downturn. Inflation rates remained relatively high due to factors such as increased commodity prices and a weakened pound. Inflation peaked at around 5% in 2011 before gradually declining.

In the years after the financial crisis up to 2021 and early 2022, inflation in the UK has generally remained around or below the 2% target set by the Bank of England. The most recent surge to over 11% in late 2022 was Due to unexpected events such as Russias invasion of Ukraine earlier that year resulting in knock on effects of higher costs of transport/fuel/utilities. Shortage of workers partially due to Brexit are amongst other contributing factors being quoted within the media.

Inflation rates have started to come down in 2023 but it is taking longer than initially expected which is having an impact. To get the most accurate and up-to-date information on inflation rates in the UK, I recommend referring to the Bank of England or the Office for National Statistics, which regularly publish official data and reports on inflation.