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UK Inflation Nightmare Rolls On, But Truss Blunts Worst-Case
Inflation moderated in the UK last month.
Not that it matters. It's small comfort to households, and from a macro perspective, the situation is now so fraught -- so impossibly convoluted -- that assessing the implications of the incoming data is mostly impossible.
To briefly recapitulate, Liz Truss's plan to cap energy bills is likely to tamp down inflation in the near-term, reducing the sense of urgency at the Bank of England, which will nevertheless hike for a seventh consecutive meeting nex
Intervention made sense. The method was far from optimal since it did not encourage conservation. A better and more fair plan would have been to cap energy costs for 75% of prior year’s consumption and to give British citizens a tax credits/or payments if their income fell below a certain level. That way everyone would benefit some, and conservation would be encouraged. Of course helping low and moderate income folks more is an anethma to Tories/Republicans. Still half a loaf better than none.
You could try something similar for corporate customers- maybe 80% for a year instead of 100% for 6 months.