The UK's inflation rate is expected to drop significantly below 10 per cent when the headline consumer price index (CPI) is updated this week after surprising economists by remaining stubbornly high in March.
The “stickiness” of inflation in the UK meant that the March figure actually came in at 10.1 per cent.
On Wednesday, economists expect the Office for National Statistics to reveal a figure of around 8 per cent, which would be the first time in eight months that inflation in Britain has been in single digits.
However, food price inflation is now proving to be more of a concern than energy costs in the broader cost of living crisis.
While energy’s role in this crisis may have peaked, that of food very much has not. Food price inflation reached around 19 per cent in March, the highest in almost half a century, said Torsten Bell, chief executive of the Resolution Foundation.
“While food price inflation should eventually fall relatively rapidly later this year, factory gate prices – which tend to lead movements in consumer food prices – suggest that the level of food prices could easily continue rising into the summer.
“As a result, food prices will be contributing far more than energy to CPI inflation through the remainder of 2023.”
A year ago, the Bank of England was forecasting that inflation would be approaching its 2 per cent target by some time in 2024. Now, most analysts feel the target will not be in sight for a least a year beyond that.
The Bank of England has raised interest rates 12 times in a row and they now sit at 4.5 per cent, the highest level in nearly 15 years.
Delayed effect
One problem is that the effect of interest rate rises is delayed – so, while the Bank of England has been putting up interest rates for more than a year, the inflation-busting purpose of each rise doesn't kick in for several months.
Another problem is that in raising interest rates, the Bank of England is attempting to dampen demand in the economy. But reducing demand for food and energy is not that easy.
“The Bank of England can print money, but it cannot print salad, bread, meat or cereals, and some will argue that increasing interest rates to cool inflation is to use a blunt tool, because the idea behind higher borrowing costs is to decrease demand for credit and decrease end-demand for goods and services,” said Russ Mould, investment director at AJ Bell.
“Everyone still has to eat, though, so this is a tickly issue.”
Even given this, Mr Mould said the Bank of England should still be concerned that the level of core CPI, which strips out volatile items such as food and fuel, is “stuck north of 6 per cent”.
“That is what is driving wage demands from workers, whether they are public or private sector, unionised or not, and policymakers’ key concern remains that wages rise and fuel demand stokes inflation, prompting more wage demand and ultimately creating the vicious spiral that bedevilled the 1970s and resulted in both inflation and interest rates going way above 10 per cent, helped along the way by a couple of oil price shocks,” he added.
Inflation around the world – in pictures
It's this upwards spiral of wages chasing inflation, and particularly food inflation, and then inflation chasing wages that scares the interest rate-setting Monetary Policy Committee at the Bank of England – do too little and inflation starts to ramp up uncontrollably; do too much and the UK economy falls headlong into recession.
“It is also worth noting that a reduction in inflation does not indicate falling prices, rather that they are rising at a slower rate than previously,” Richard Hunter, head of markets at Interactive Investor, told The National.
“As such, there should be some mitigation on the increases for goods and services which cost-pressured consumers are encountering, although even the current round of pay increases are not necessarily keeping up with these higher costs.”
“An additional complication is that wage rises are themselves inflationary and therefore part of the mix.”
Food replaces energy
Normally, food prices in the UK tend to ease off during the summer months as domestic crops start to replace more expensive imports. But so far this year, there has been a marked rise in farm gate prices.
A report from the Resolution Foundation called Food for Thought predicts that by summer food price rises will be weighing more heavily on overall inflation than energy costs.
“Between March and September 2023, food prices are expected to contribute around 2 percentage points to inflation each month, while the contribution of energy prices is set to fall from 3 percentage points to less than 1,” the report said.
Meanwhile, as it seems households are swapping one inflationary problem for another, the Bank of England is, once again, being accused of doing too little, too late.
UK Chancellor says 'best tax cut right now is a cut in inflation' – video
Appearing in front of a committee of MPs last week, the top officials at the Bank of England were asked more than once why interest rates were still at 0.5 per cent, when inflation was already at 6 per cent, months before the Russian invasion of Ukraine in February last year.
However, Bank of England Governor Andrew Bailey told the British Chambers of Commerce meeting last week that economic modelling shows that had the bank increased rates faster and earlier it would not have helped.
“The headline is that, even if we had had the benefit of full hindsight in the run-up to the war in Ukraine, and ample advanced warning – which for the record we did not, no one did – then in order to keep inflation at around 2 per cent, we would have had to raise the bank rate well into double digits, sending unemployment much higher than it is today, and we would have had to do so in the middle of the worst pandemic in more than a century,” Mr Bailey said.
Nonetheless, the Bank of England said last week that it expects “inflation to begin to fall quite sharply from now on”.
“But we need to make sure that it falls and then stays low.”
Some see comments like that as an indication that interest rates could go up at least once more, possibly peaking at 5 per cent, at some point over the summer, if inflation, and particular food price inflation, remains strong.
Either way, households are unlikely to see relief for their already battered budgets any time soon.
“Inflation is expected to have fallen back into single figures in April, as hikes in energy prices last April drop out of the data,” said Sarah Coles, head of personal finance at Hargreaves Lansdown.
“However, while we’ve waited a long time for inflation to fall, we may need to wait a while longer for any more significant change. Meanwhile, April’s drop is unlikely to ease the pressure on our pockets.”
Meanwhile, figures from retail intelligence company Kantar showed a slight dip in grocery prices this month.
Prices of goods over the four weeks to May 14 were 17.2 per cent higher than a year ago, down from April's 17.3 per cent, Kantar said.
For example, the price of four pints of milk has come down by 8p since April, but is still 30p higher than a year ago.
“The drop in grocery price inflation, which is down by 0.1 percentage points on last month's figure, is without doubt welcome news for shoppers but it is still incredibly high – 17.2 per cent is the third fastest rate of grocery inflation we've seen since 2008,” Fraser McKevitt, said head of retail and consumer insight at Kantar.
“This could add an extra £833 to the average household's annual grocery bill if consumers don't shop in different ways.”
Those different ways include opting to buy supermarket own-labelled products, sales of which so far this month have been nearly double those of branded goods, according to Kantar.
Chancellor to discuss curbing rampant food inflation with manufacturers
Chancellor Jeremy Hunt will ask food manufacturers to do what they can to support consumers amid skyrocketing food prices.
The Chancellor will meet representatives from the industry on Tuesday to raise concerns over rampant food inflation, according to the Treasury.
“High food prices are proving stubborn so we need to understand what’s driving that,” Mr Hunt said.
“That’s why I’m asking industry to work with us as we halve inflation, to help ease the pressure on household budgets.”
The Chancellor will also meet the competition watchdog to discuss its investigation into whether any failure in competition is leaving consumers paying higher grocery and fuel prices than they should be.
The Competition and Markets Authority last week said it had not seen evidence pointing to specific competition concerns in the grocery sector “at this stage”, but it was “important to be sure that weak competition is not adding to the problems”.
It will provide an update on its work over the coming months.
The watchdog also announced an update on the Road Fuel market study it began last year, saying that indications were that higher pump prices could not be attributed solely to factors outside the control of the retailers and “appear in part to reflect some weakening of competition in the road fuel retail market”.
The CMA is also scrutinising supermarket unit pricing to ensure retailers are sticking to rules that help consumers accurately compare products and choose the best value for money.
The government will consider updating pricing rules, including by strengthening the Price Marking Order 2004, once the CMA review has concluded, the Treasury said.
The legislation governing the display of prices of goods specifies a range of different units that can be used depending on the product type, which can result in confusion for shoppers.
Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
MATCH INFO
Uefa Champions League, last 16, first leg
Liverpool v Bayern Munich, midnight (Wednesday), BeIN Sports
UAE currency: the story behind the money in your pockets
What sanctions would be reimposed?
Under ‘snapback’, measures imposed on Iran by the UN Security Council in six resolutions would be restored, including:
- An arms embargo
- A ban on uranium enrichment and reprocessing
- A ban on launches and other activities with ballistic missiles capable of delivering nuclear weapons, as well as ballistic missile technology transfer and technical assistance
- A targeted global asset freeze and travel ban on Iranian individuals and entities
- Authorisation for countries to inspect Iran Air Cargo and Islamic Republic of Iran Shipping Lines cargoes for banned goods
Coffee: black death or elixir of life?
It is among the greatest health debates of our time; splashed across newspapers with contradicting headlines - is coffee good for you or not?
Depending on what you read, it is either a cancer-causing, sleep-depriving, stomach ulcer-inducing black death or the secret to long life, cutting the chance of stroke, diabetes and cancer.
The latest research - a study of 8,412 people across the UK who each underwent an MRI heart scan - is intended to put to bed (caffeine allowing) conflicting reports of the pros and cons of consumption.
The study, funded by the British Heart Foundation, contradicted previous findings that it stiffens arteries, putting pressure on the heart and increasing the likelihood of a heart attack or stroke, leading to warnings to cut down.
Numerous studies have recognised the benefits of coffee in cutting oral and esophageal cancer, the risk of a stroke and cirrhosis of the liver.
The benefits are often linked to biologically active compounds including caffeine, flavonoids, lignans, and other polyphenols, which benefit the body. These and othetr coffee compounds regulate genes involved in DNA repair, have anti-inflammatory properties and are associated with lower risk of insulin resistance, which is linked to type-2 diabetes.
But as doctors warn, too much of anything is inadvisable. The British Heart Foundation found the heaviest coffee drinkers in the study were most likely to be men who smoked and drank alcohol regularly.
Excessive amounts of coffee also unsettle the stomach causing or contributing to stomach ulcers. It also stains the teeth over time, hampers absorption of minerals and vitamins like zinc and iron.
It also raises blood pressure, which is largely problematic for people with existing conditions.
So the heaviest drinkers of the black stuff - some in the study had up to 25 cups per day - may want to rein it in.
Rory Reynolds
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How to help
Send “thenational” to the following numbers or call the hotline on: 0502955999
2289 – Dh10
2252 – Dh 50
6025 – Dh20
6027 – Dh 100
6026 – Dh 200
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Zayed Sustainability Prize
'Worse than a prison sentence'
Marie Byrne, a counsellor who volunteers at the UAE government's mental health crisis helpline, said the ordeal the crew had been through would take time to overcome.
“It was worse than a prison sentence, where at least someone can deal with a set amount of time incarcerated," she said.
“They were living in perpetual mystery as to how their futures would pan out, and what that would be.
“Because of coronavirus, the world is very different now to the one they left, that will also have an impact.
“It will not fully register until they are on dry land. Some have not seen their young children grow up while others will have to rebuild relationships.
“It will be a challenge mentally, and to find other work to support their families as they have been out of circulation for so long. Hopefully they will get the care they need when they get home.”
The%20Specs%20
%3Cp%3E%3Cstrong%3ELamborghini%20LM002%3C%2Fstrong%3E%3Cbr%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%205.2-litre%20V12%3Cbr%3E%3Cstrong%3EPower%3A%3C%2Fstrong%3E%20450hp%20at%206%2C800rpm%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E500Nm%20at%204%2C500rpm%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3EFive-speed%20manual%3Cbr%3E%3Cstrong%3E0-100kph%3A%3C%2Fstrong%3E%209%20seconds%20(approx)%3Cbr%3E%3Cstrong%3ETop%20speed%3A%3C%2Fstrong%3E%20210kph%20(approx)%3Cbr%3E%3Cstrong%3EYears%20built%3A%3C%2Fstrong%3E%201986-93%3Cbr%3E%3Cstrong%3ETotal%20vehicles%20built%3A%3C%2Fstrong%3E%20328%3Cbr%3E%3Cstrong%3EValue%20today%3A%3C%2Fstrong%3E%20%24300%2C000%2B%3Cbr%3E%3C%2Fp%3E%0A
UAE currency: the story behind the money in your pockets
Dhadak 2
Director: Shazia Iqbal
Starring: Siddhant Chaturvedi, Triptii Dimri
Rating: 1/5
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
The specs
Engine: 3.9-litre twin-turbo V8
Transmission: seven-speed
Power: 620bhp
Torque: 760Nm
Price: Dh898,000
On sale: now
Why are asylum seekers being housed in hotels?
The number of asylum applications in the UK has reached a new record high, driven by those illegally entering the country in small boats crossing the English Channel.
A total of 111,084 people applied for asylum in the UK in the year to June 2025, the highest number for any 12-month period since current records began in 2001.
Asylum seekers and their families can be housed in temporary accommodation while their claim is assessed.
The Home Office provides the accommodation, meaning asylum seekers cannot choose where they live.
When there is not enough housing, the Home Office can move people to hotels or large sites like former military bases.
VERSTAPPEN'S FIRSTS
Youngest F1 driver (17 years 3 days Japan 2014)
Youngest driver to start an F1 race (17 years 166 days – Australia 2015)
Youngest F1 driver to score points (17 years 180 days - Malaysia 2015)
Youngest driver to lead an F1 race (18 years 228 days – Spain 2016)
Youngest driver to set an F1 fastest lap (19 years 44 days – Brazil 2016)
Youngest on F1 podium finish (18 years 228 days – Spain 2016)
Youngest F1 winner (18 years 228 days – Spain 2016)
Youngest multiple F1 race winner (Mexico 2017/18)
Youngest F1 driver to win the same race (Mexico 2017/18)
Results
3pm: Maiden Dh165,000 (Dirt) 1,400m, Winner: Lancienegaboulevard, Adrie de Vries (jockey), Fawzi Nass (trainer).
3.35pm: Maiden Dh165,000 (Turf) 1,600m, Winner: Al Mukhtar Star, Adrie de Vries, Fawzi Nass.
4.10pm: Handicap Dh165,000 (D) 2,000m, Winner: Gundogdu, Xavier Ziani, Salem bin Ghadayer.
4.45pm: Handicap Dh185,000 (T) 1,200m, Winner: Speedy Move, Sean Kirrane, Satish Seemar.
5.20pm: Handicap Dh185,000 (D) 1,600m, Winner: Moqarrar, Dane O’Neill, Erwan Charpy.
5.55pm: Handicap Dh175,000 (T) 1,800m, Winner: Dolman, Richard Mullen, Satish Seemar.
Match info
Who: India v Afghanistan
What: One-off Test match, Bengaluru
When: June 14 to 18
TV: OSN Sports Cricket HD, 8am starts
Online: OSN Play (subscribers only)
MATCH INFO
FA Cup fifth round
Chelsea v Manchester United, Monday, 11.30pm (UAE), BeIN Sports
Company%20profile
%3Cp%3EName%3A%20Tabby%3Cbr%3EFounded%3A%20August%202019%3B%20platform%20went%20live%20in%20February%202020%3Cbr%3EFounder%2FCEO%3A%20Hosam%20Arab%2C%20co-founder%3A%20Daniil%20Barkalov%3Cbr%3EBased%3A%20Dubai%2C%20UAE%3Cbr%3ESector%3A%20Payments%3Cbr%3ESize%3A%2040-50%20employees%3Cbr%3EStage%3A%20Series%20A%3Cbr%3EInvestors%3A%20Arbor%20Ventures%2C%20Mubadala%20Capital%2C%20Wamda%20Capital%2C%20STV%2C%20Raed%20Ventures%2C%20Global%20Founders%20Capital%2C%20JIMCO%2C%20Global%20Ventures%2C%20Venture%20Souq%2C%20Outliers%20VC%2C%20MSA%20Capital%2C%20HOF%20and%20AB%20Accelerator.%3Cbr%3E%3C%2Fp%3E%0A
Match info:
Leicester City 1
Ghezzal (63')
Liverpool 2
Mane (10'), Firmino (45')
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Alaan%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202021%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Parthi%20Duraisamy%20and%20Karun%20Kurien%3Cbr%3E%3Cstrong%3ESector%3A%3C%2Fstrong%3E%20FinTech%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%3C%2Fstrong%3E%20%247%20million%20raised%20in%20total%20%E2%80%94%20%242.5%20million%20in%20a%20seed%20round%20and%20%244.5%20million%20in%20a%20pre-series%20A%20round%3Cbr%3E%3Cbr%3E%3C%2Fp%3E%0A
In-demand jobs and monthly salaries
- Technology expert in robotics and automation: Dh20,000 to Dh40,000
- Energy engineer: Dh25,000 to Dh30,000
- Production engineer: Dh30,000 to Dh40,000
- Data-driven supply chain management professional: Dh30,000 to Dh50,000
- HR leader: Dh40,000 to Dh60,000
- Engineering leader: Dh30,000 to Dh55,000
- Project manager: Dh55,000 to Dh65,000
- Senior reservoir engineer: Dh40,000 to Dh55,000
- Senior drilling engineer: Dh38,000 to Dh46,000
- Senior process engineer: Dh28,000 to Dh38,000
- Senior maintenance engineer: Dh22,000 to Dh34,000
- Field engineer: Dh6,500 to Dh7,500
- Field supervisor: Dh9,000 to Dh12,000
- Field operator: Dh5,000 to Dh7,000
Dubai Bling season three
Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
Washmen Profile
Date Started: May 2015
Founders: Rami Shaar and Jad Halaoui
Based: Dubai, UAE
Sector: Laundry
Employees: 170
Funding: about $8m
Funders: Addventure, B&Y Partners, Clara Ventures, Cedar Mundi Partners, Henkel Ventures
UEFA CHAMPIONS LEAGUE FIXTURES
All kick-off times 10.45pm UAE ( 4 GMT) unless stated
Tuesday
Sevilla v Maribor
Spartak Moscow v Liverpool
Manchester City v Shakhtar Donetsk
Napoli v Feyenoord
Besiktas v RB Leipzig
Monaco v Porto
Apoel Nicosia v Tottenham Hotspur
Borussia Dortmund v Real Madrid
Wednesday
Basel v Benfica
CSKA Moscow Manchester United
Paris Saint-Germain v Bayern Munich
Anderlecht v Celtic
Qarabag v Roma (8pm)
Atletico Madrid v Chelsea
Juventus v Olympiakos
Sporting Lisbon v Barcelona
Founders: Abdulmajeed Alsukhan, Turki Bin Zarah and Abdulmohsen Albabtain.
Based: Riyadh
Offices: UAE, Vietnam and Germany
Founded: September, 2020
Number of employees: 70
Sector: FinTech, online payment solutions
Funding to date: $116m in two funding rounds
Investors: Checkout.com, Impact46, Vision Ventures, Wealth Well, Seedra, Khwarizmi, Hala Ventures, Nama Ventures and family offices
Qosty Byogaani
Starring: Hani Razmzi, Maya Nasir and Hassan Hosny
Four stars
Types of fraud
Phishing: Fraudsters send an unsolicited email that appears to be from a financial institution or online retailer. The hoax email requests that you provide sensitive information, often by clicking on to a link leading to a fake website.
Smishing: The SMS equivalent of phishing. Fraudsters falsify the telephone number through “text spoofing,” so that it appears to be a genuine text from the bank.
Vishing: The telephone equivalent of phishing and smishing. Fraudsters may pose as bank staff, police or government officials. They may persuade the consumer to transfer money or divulge personal information.
SIM swap: Fraudsters duplicate the SIM of your mobile number without your knowledge or authorisation, allowing them to conduct financial transactions with your bank.
Identity theft: Someone illegally obtains your confidential information, through various ways, such as theft of your wallet, bank and utility bill statements, computer intrusion and social networks.
Prize scams: Fraudsters claiming to be authorised representatives from well-known organisations (such as Etisalat, du, Dubai Shopping Festival, Expo2020, Lulu Hypermarket etc) contact victims to tell them they have won a cash prize and request them to share confidential banking details to transfer the prize money.
* Nada El Sawy
More on Quran memorisation:
Scores:
Day 4
England 290 & 346
Sri Lanka 336 & 226-7 (target 301)
Sri Lanka require another 75 runs with three wickets remaining
Essentials
The flights
Emirates flies direct from Dubai to Seattle from Dh6,755 return in economy and Dh24,775 in business class.
The cruise
UnCruise Adventures offers a variety of small-ship cruises in Alaska and around the world. A 14-day Alaska’s Inside Passage and San Juans Cruise from Seattle to Juneau or reverse costs from $4,695 (Dh17,246), including accommodation, food and most activities. Trips in 2019 start in April and run until September.
