Inflation was first stoked by supply chain issues during the coronavirus pandemic and then Russia’s full-scale invasion of Ukraine, which pushed up food and energy costs.While the interest rate increases have helped in the battle against inflation, the squeeze on consumer spending, primarily through higher mortgage rates, has weighed on the British economy, which is barely growing.Whatever happens on the interest rate front in the coming months, it’s likely that relatively high borrowing rates and low economic growth will be the backdrop for the general election which has to take place within a year. That’s a concern for the governing Conservative Party, which opinion polls say is way behind the main opposition Labour Party ahead of the vote.
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