UK Inflation Looks More 2011 Than 2022 for Bank of England

When Britain was last hit by a major energy shock after Russia invaded Ukraine in 2022, the Bank of England cranked up interest rates to chase down spiraling inflation. This time is different.

Four years ago, the spike in prices hit an overheating economy. Unemployment was at a 48-year low, vacancies were at a record high and wages were growing at the fastest pace this millennium. Households had pandemic savings to spend, the government was stoking demand and rates had just come off a record low of 0.1%.