Blog: June 2021
CPI inflation rose by a large amount (0.6%) for the second month running and is now at 2.1%. The main drivers of the increase from April were Clothing and footwear and Recreation and Culture. Women’s clothing showed some very large increases. The current high levels of monthly inflation are unlikely to be sustained and are due to recovery of some prices from low levels in the first lockdown and short-run adjustment and supply-chain issues. Inflation will continue to increase until it peaks in early 2022 and then comes down again. The peak may be above 3% but is unlikely to exceed 4%. The high level of inflation in the US is driven by very different factors to UK inflation and we do not expect UK inflation to “catch up” with the high levels of US inflation
There is no doubt that Covid-19 has caused significant disruption to children’s lives and there is understandable concern about their educational progress. This has only been exacerbated by the recent outcry about the level of funding announced by the government to support their “catch-up” plans, which resulted in the resignation of Sir Kevan Collins. In addition, the current narrative around “catch-up” does not take account of children’s social and emotional needs as we move forward, focusing primarily on educational outcomes. Moreover, the Government “catch-up” plan is not clear about its long-term view. We don’t know what the ongoing impact might be, and children will need a prolonged period of additional support to avoid falling through the net.
The Bank of England is searching for a new Chief Economist, and the formal deadline for applications was Wednesday 2 June. But what is the Bank’s Chief Economist expected to do? And what skills and qualifications does he or she need? After all, the Bank has lots of economists. What special responsibilities does our central bank need a Chief Economist to carry out?