That meant mortgage interest payments spiked into double digits.Īnd as a result servicing the national debt became a serious problem. Unemployment rose as the economy tipped into recession, and the government had to pump up interest rates in a bid to bolster the pound and control the surge. Strikes erupted as there was pressure for pay packets to keep pace with prices. People would rush to buy goods with their wages after pay-day, as the costs were rising so quickly.

In Zimbabwe between 20 the monthly inflation rate was estimated to have reached a mind-boggling 79.6billion per cent.Īlthough inflation has faded in the minds of Britons who have become used to ultra-low interest rates and stable prices, it caused chaos here in the 1970s.ĭeregulation of the mortgage market, the emergence of credit cards and an overheating economy drove the rate to an eye-watering 25 per cent in 1975.

The German Weimar Republic effectively collapsed after the value of the mark went from around 90 marks to the US dollar in 1921 to 7,400 marks to the dollar in 1921. In extreme examples, it has spiralled out of control and sparked panic. Inflation has long been seen as one of the biggest threats to economies. 'We are also providing more immediate support, including through the £500 million Household Support Fund for the most vulnerable families, fuel and alcohol duty freezes, and the energy price cap.' 'We're helping people get into work, progress and keep more of what they earn, through our Plan for Jobs and by effectively cutting taxes for workers receiving Universal Credit. However, others insist the economy is still in a delicate state after being hammered by Covid and lifting interest rates will not help as the factors at play are global.Ĭhancellor Rishi Sunak said: 'Many countries are experiencing higher inflation as we recover from Covid and we know people are facing pressures with the cost of living, which is why we are taking action worth more than £4.2billion to help them. Some economists warn that allowing it to get entrenched in wages could trigger a spiral not seen in the UK since the 1970s, causing misery for millions. Pressure on prices in the wake of the pandemic has been causing alarm around the world, with the inflation rate in the US reaching a 30-year high. The figure is more than twice the Bank of England's target and immediately fuelled speculation that it will be forced to act on rates within weeks, after surprising markets by holding off earlier this month.

Labour said the eye-watering increase would leave households £1,000 a year worse off. The rise - a peak not seen since November 2011 - was even bigger than expected, after analysts pencilled in 3.9 per cent. The headline CPI rate spiked to 4.2 per cent in October from 3.1 per cent in September, driven by supply chain chaos, labour shortages and surges in energy costs. Families are facing a brutal squeeze after Inflation soared to the highest level in a decade - heaping pressure on the Bank of England to raise interest rates.

Smashing four cards per level