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UK inflation rate has hit 10% for the first time since 1982, edged on by food prices soaring

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THE UK Inflation rate hit a new 40-year high last month, rising above 10% for the first time since 1982 and piling further pain on households already struggling to pay their bills.

Annual consumer price inflation hit 10.1% in July, according to data published by the Office for National Statistics on Wednesday, up from 9.4% in June.

Soaring food prices — up 12.7% since July 2021 — were the largest single contributor to the acceleration in inflation, the ONS said.

The headline inflation number was higher than predicted by a Reuters poll of economists, and food inflation is now running at its highest level in 14 years.

“All the eleven food and non-alcoholic beverage classes made upward contributions to the change in the annual inflation rate, where prices overall rose this year but fell a year ago,” the ONS said.

The largest upward contributions came from bread and cereals, and from milk, cheese and eggs, with notable price increases in cheddar cheese and yoghurts.

On a monthly basis, the consumer price index was up 0.6% in July, compared with no change a year ago.

Higher gasoline and diesel prices, together with rising air fares, were also to blame, the ONS added.

The higher-than-expected reading will keep the pressure on the Bank of England to follow last month’s biggest increase in interest rates in 27 years with further rate hikes despite mounting evidence of the pressure on household budgets and signs that the UK economy may already have entered a recession.

Data published last week showed that the country’s GDP dropped by 0.1% in the second quarter of this year.

And Tuesday’s official labour market report found that paychecks rose by 4.7% between April and June, meaning average incomes fell by 3% during the period once inflation is taken into account — the biggest drop in real wages since the ONS began keeping records more than 20 years ago.

“The situation is miserable for UK consumers, who are currently being squeezed from all sides,” wrote Kallum Pickering, senior economist at Berenberg, in a note to clients. “Wages are not rising fast enough to offset surging inflation, but they are rising too fast for the [Bank of England’s] liking, as it wants to return inflation to target,” he added.

Inflation is forecast to go even higher later this year, driven by further rises in regulated energy bills in October.

Electricity prices have already risen by 54% and gas prices by 95.7% in the 12 months to July 2022 because of rocketing wholesale costs, worsened by Russia’s invasion of Ukraine in late February.

UK government officials are reportedly examining options to provide more support to households.

But Liz Truss, frontrunner to succeed Boris Johnson as next UK prime minister in early September, has yet to set out a detailed plan beyond promising tax cuts.

The opposition Labour Party is calling for a windfall tax on UK oil and gas companies to be extended to help fund a freeze in household heating bills this winter.

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Business

Stephen Crabb leads inquiry on retaining community bank services  

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PRESELI Pembrokeshire MP, and Chair of the Welsh Affairs Select Committee Stephen Crabb is leading an inquiry in Parliament that will investigate the closure of high street banks in Wales, as well as access to cash.

In November 2023, Pembrokeshire saw the closure of Lloyds Bank in St Davids, and in the coming months both Barclays Bank and Halifax in Haverfordwest are set to close. In recent years, Wales has experienced a rapid decline in the number of high street banking services available to the public. Already in 2024, 23 high street bank closures have been announced in Wales, while automated teller machines (ATMs) declined by nearly a quarter between 2018 and 2023.

The Committee willconsider how declining high street banking services are impacting vulnerable people and small businesses across Wales, who are often more reliant on cash than digital banking. It will also examine how Wales is being affected by the loss of high street bank services, and whether the problem is worse in Wales than other parts of the UK.

Mr Crabb is a staunch advocate for retaining community banking facilities, especially in rural communities like Pembrokeshire where many local branches remain the only source of face-to-face banking provision for miles.

Recently Mr Crabb challenged Barclays Bank senior management on their decision to close the bank branch in Haverfordwest– a move that will see Barclays not only pull out of the county town, but means they won’t have a branch left anywhere in Pembrokeshire. He has also engaged with LINK – the UK’s largest cash machine network – and continues to campaign on the basis that a Banking Hub is established and that ATM machines should be retained or installed, especially in areas worst affected by the closures.  

Following the launch of the inquiry, MP Crabb added: “It is really sad to see so many banks across Wales closing as online banking grows in popularity. Despite the advantages of online banking, for a rural community with an ageing population like Pembrokeshire, bank branches hold huge importance as they offer face-to-face customer service.”

“I am acutely aware of the inconvenience that the bank closures locally have already caused following hundreds of replies from constituents to my ‘online banking survey’ ”

“I am looking forward to gathering further evidence on this subject through the committee’s inquiry, and will continue to put pressure on the relevant stakeholders to ensure that adequate alternative provisions are made through the establishment of banking hubs as well as the instalment of ATM machines where necessary.”

“In this inquiry, we are particularly keen to hear from those likely to be directly affected by the shift away from cash and physical banks. I encourage anyone with first-hand experience of losing banking services to give evidence to the Committee”

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Trains resume between Carmarthen and Pembroke Dock as works end

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TRAIN services resumed this morning (Thursday 28 March) after ten days of essential round-the-clock work to upgrade track and drainage between Carmarthen and Pembroke Dock.

The railway was closed from Monday 18 March to Wednesday 27 March to allow Network Rail teams to replace more than 200 metres of track and 300 tonnes of ballast (track stones) between Pembroke station and Pembroke Dock.

Work to improve the drainage between Narbeth and Kilgetty stations was also completed at the same time.

Nick Millington, Network Rail Wales and Borders route director, said: “This essential work in Pembrokeshire demonstrates our commitment to improving the reliability of the service we provide to passengers along our route.

“We know that replacing the track can be disruptive and very noisy, so I would like to thank the residents of Pembroke for their patience while our team carried out this crucial work.”

Colin Lea, Planning and Performance Director at Transport for Wales said: “We’re pleased that our colleagues in Network Rail have completed this essential work and that Transport for Wales rail services resumed today.

“We’d like to thank passengers for their patience while this work has progressed and look forward to welcoming passengers back in time for the Easter weekend.”

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News

Welsh Water has increased sewage discharges into waterways ‘by 40%’

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NEW figures released by the Environment Agency have shown that Dwr Cymru discharged sewage into waterways for a staggering 23,354 hours last year, a 40% increase on 2022. 

The Welsh Liberal Democrats are now calling for tougher action against sewage dumping in Welsh waterways.

The party has also called for a halt on bonuses for water company bosses whose firms have dumped sewage into waterways.

Conservative MPs have consistently voted against measures which would have helped to tackle the crisis.

The Leader of the Welsh Liberal Democrats Jane Dodds MS said: “It is a complete scandal that filthy sewage is being pumped into our nation’s rivers and waterways without consequence.

“It’s beggars’ belief that both the UK Conservative Government and the Welsh Labour government are allowing water firms to get away with this environmental vandalism.

“We as a party are calling for tougher action to stop sewage being dumped in local waterways. We have also called for a halt on bonuses for water company fat cats whose firms have pumped filth into our waterways.”

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