Name: Why Core Inflation Is Rising in the U.K., But Falling in Other Economies | WSJ
Uploaded: 2023-07-16T23:08:05.000Z
Duration: 3 min 3 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

- [Narrator] That was UK Prime Minister Rishi Sunak

Inflation has since fallen to 8.7%, which is good,

are more interested in something else, core inflation,

which has actually risen since the start of the year.

for Rishi Sunak's big pledge? (audience applauding)

First, it's important to understand the difference

between core inflation and headline inflation.

- Headline inflation is the classic benchmark

It calculates an index based on stuff that we buy,

Core inflation strips out the more volatile things

and this is the metric that the Bank of England

- [Narrator] UK headline inflation is falling,

but at a slower pace than of a major economies.

It's now at its highest level since 1992,

fueled by higher wages and corporate profits.

- One of the big drivers of this is services,

so that's prices for things like air travel,

This is in contrast with the US and the Eurozone

where core inflation has been coming down recently.

In the US, one of the big reasons for this

was the cooling of housing rental prices.

- [Narrator] Persistently high core inflation

could make the Prime Minister's goal harder to achieve.

The Treasury Chief says, "The target of around 5% inflation

is still possible, but it won't be easy."

- I think the sweet spot for the UK economy

in terms of our long-term competitiveness

is if we can do the best of what European countries do

will in part depend on if that core inflation rate

The government is supported in its efforts

The Central Bank sees raising interest rates

It has been raising the rate since the end of 2021.

which leads to people having less money to spend,

- Central Banks have had a really difficult job recently,

with interest rates being their main tool,

but they also have to try to raise interest rates

without damaging the economy too severely.

So it's about finding this delicate balancing act.

In the US, we've seen the Fed pause interest rates

while it's assessing the impact of his latest hikes,

because of this persistently high inflation,

to be able to pause its hiking cycle anytime soon.

Subtitles ListPlay Video

Why Core Inflation Is Rising in the U.K., But Falling in Other Economies | WSJ

stuff

ultimately

bunch

delicate