The British economy continues to face ever rising inflation

The Chancellor is handy with a petrol pump Credit: HM Treasury flickr

THE British economy continues to face ever rising inflation, forcing the Bank of England to raise interest rates to their highest level since 2009 and to warn of a possible recession.

One of the main reasons for this huge spike in inflation is the cost of oil and gas prices which were spiralling towards the end of 2021 but have shot up further with Russia’s invasion of Ukraine.

Despite claiming to have lost £3.1 billion by cancelling deals involved with Russian gas and oil, energy giant Shell has reported profits of £7.3 billion in the first quarter of 2022, more than double the profits it made in the previous year.

Similar increases in profits have been confirmed by other companies such as BP and Norwegian company Equinor which supplies Britain with 25 per cent of its natural gas has also reported record profits.

Many politicians argue that Chancellor Rishi Sunak should introduce some form of ‘windfall’ tax on the companies benefiting from these enormous hikes in profits but, until now, he has appeared opposed to this concept.

The concept of such a temporary tax is not to penalise the companies by taxing all of their profits but by taking a percentage of the unexpected additional profits, the UK economy would benefit and this would release funds to help those most hit by inflation such as pensioners and the lowest paid.

The latest ‘gaff’ by Prime Minister Boris Johnson who when told that a pensioner was riding buses most days purely to keep warm wrongly claimed that it was thanks to him that she has a free bus pass, probably didn’t go down well with voters in the May local elections.

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