Inflation is becoming an “unstoppable train” and “could throw us into recession if not controlled”, warns leading recruitment specialist and businessman, Gary Ashworth.
Commenting on April 13th record inflation figures for March 2022 released by the Office for National Statistics, which showed a higher than expected 7 percent increase in the cost of living in the previous 12 months through analysis of the Consumer Price Index, Gary, Founder and Chairman of specialist recruiter InterQuest Group, said:
“These are the highest levels we have seen since 1992 and we are all going to start feeling the pain now and in coming months. Things will get worse before they get better as the Bank of England has already forecast that inflation could rise to 8 percent or more.
“I predict that the figure will approach 10 percent before the end of the year, since it’s not within their gift to control. That’s why we see why we’ve recently seen the government begging nations with terrible human rights issues to produce more oil so that the price decreases.”
What are the stats?
On April 13th, food, and non-alcoholic drink price rise of 5.9 percent. This is the largest since September 2011. Annual food and non-alcoholic drink inflation accelerated to 5.9 percent in March from 5.1 percent in February.
In the FDF’s Food Prices Report published in July 2021, it was predicted that additional costs to industry from UK Government regulation will lead to an annual increase of food and drink shopping per household of £160. That increase will prove even higher at current inflation rates.
Chief executive of the Food and Drink Federation, Karen Betts:
“Food price inflation is already at its highest level for over 10 years and the disruption in global markets means prices are likely to continue to climb in the months to come, which is particularly concerning for low-income households.
“Food and drink manufacturers are doing all they can to absorb rises in their ingredient, raw material and energy costs. But businesses must also remain viable and the reality of current inflation means that some price increases are having to be passed on.
“We continue to call on the government to conduct a robust review of regulation and to act where that’s adding to price rises in shops without a like benefit to shoppers. There are a number of areas where this would help, including on plastics packaging where the UK’s recycling infrastructure is lagging behind and new laws mean the costs of this are being passed to consumers instead of prompting necessary government investment.”
What happens if inflation gets too high?
“When inflation gets too high as it is doing, it becomes difficult to control and eventually can become unstoppable. It blows through entire continents, causing price hikes, raising interest rates, increasing mortgage payments, and devastating the value of people’s savings,” says Ashworth.
Ashworth also warned that ‘the genie had now been let out of the bottle and would be difficult to put back in’.
He said: “People are being made to pay more for food, petrol and mortgages and will demand pay rises to cover the increase. Firms will then pass on price rises to customers and so the merry-go-round continues. Companies can’t stop this in isolation.”
“Governments have to raise interest rates, curb money supply and restrict public sector wages, hoping that the rest of industry will follow suit.”
And Ashworth said that despite yesterday’s ONS labour market figures which showed employment was back to pre-pandemic levels, pay would struggle to keep up with increasing inflation.
He said: “Rapidly rising inflation such as we are seeing is the equivalent of a hefty pay cut and can lead to recession and ruin economies. It can be the death knell for businesses and governments and even destabilise entire countries.
“Today’s surge of inflation has spiked quickly and is proving stubborn and much more difficult to control than central banks thought possible.
“Oil prices rising to “infinity and beyond” have led to increased fuel prices and costs to manufacturing have risen exponentially. Expensive fertilisers and farming products have ensured higher food prices and the global disruption of supply chains caused by the pandemic and Brexit add to the problem as delivery costs have spiralled too.
“Everything is interlinked and once the ball of inflation starts rolling down the hill, it’s difficult to slow it down or stop it.”
“There’s pain waiting for us all as central banks and governments use price and wage controls to halt this disease of inflation.”
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at the University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.