Boris Johnson’s government has repeatedly said that the cost of living crisis is a “global problem” – so what are inflation rates like in other countries?
So how does the UK CPI compare to those in Europe?
NationalWorld has analyzed the latest data from our closest neighbors to see if the UK’s inflation rate is at the level the government is saying.
What is the UK CPI rate?
The CPI is an internationally comparable method of tracking inflation for a typical basket of basic goods and services.
Prices for everything from groceries to clothes to cars are included, with the basket weighted with the items most important to households.
For example, milk and bread have a greater impact on the headline inflation rate than smartwatches.
While the CPI is an important metric that we can use to determine whether or not we should change our spending habits, it’s also used to set state pensions, benefits, and statutory sick pay.
As of April 2022 (the most recent month for which we have data), the UK CPI rate was 9%.
The entire shopping cart thus cost 9% more than in April 2021.
To put that in perspective, the CPI inflation rate in April 2021 compared to March 2020 was just 1.5%.
How does the UK compare to Europe?
When NationalWorld first compared UK inflation to Europe in January 2022, we found that it had recorded one of the largest proportional increases year-on-year – with only Spain, Belgium and Ireland experiencing larger jumps.
But while by March 2022 the picture had changed and the UK was less of an outlier than before, April’s huge surge in CPI means the UK is now only behind the Netherlands.
This mainly explains why the inflation rates of Spain (-1.5%) and the Netherlands (-0.1%) have fallen compared to March 2022 – although energy in the Netherlands is still 136% more expensive than a year ago .
You can see how much of an outlier the UK has become by comparing its current inflation rate to where it was a year ago (see below).
Only in the Netherlands have prices risen at a similar pace to the UK.
A major caveat about inflation-star Belgium is that all wages in the country are CPI-linked; So when inflation rises, consumers don’t lose purchasing power.
While the UK is now ahead of most major European economies, inflation remains at record highs across the board.
The main themes behind these numbers are broadly similar to those in the UK.
According to reports, Covid-19 is still hitting supply chains across Europe.
Food and beverage prices are also putting a lot of pressure on CPI numbers across the board.
In April they were up 6.7% yoy in the UK, 8.5% in the Netherlands, 8.6% in Germany and 10.1% in Spain.
All of these increases were a direct result of the Russian war in Ukraine, which has particularly hit cooking oil – a key staple of many foods – and grain stocks.
Is Britain doing better or worse than Europe?
The problems currently facing the UK are similar to those seen in EU countries and Europe more broadly.
However, slowing or reducing inflation in some countries, as well as interventions by some EU governments – such as the 21% fuel tax cut in the Netherlands and the €25 billion cost-of-living support package in France – show that the UK government is doing this not the hostage of fortune that it claims to be.
So while the cost of living crisis is indeed an international issue, the UK government could do more to protect consumers from inflation.
The caveat is that the EU could still suffer a big spike in inflation if Russia cuts off its energy supplies.
But with each week that passes, the likely severity of this surge diminishes as the EU gradually turns its back on Russian oil and gas.
And any surge the bloc suffers would also be felt in the UK given its exposure to global prices.
So one could argue that the EU is currently better off than the UK with its cost of living crisis.
https://www.nationalworld.com/news/uk/inflation-rates-europe-2022-how-january-uk-cpi-compares-eu-countries-germany-france-3571914 How the UK’s CPI inflation rate compares to EU countries