Gavin Grey: UK correspondent on UK inflation jumping to 3.8 percent

UK inflation figure rises in data just released, and it's prompted concerns among experts.

The 3.8 percent rise in inflation over the 12 months to July this year is the largest increase in inflation since January 2024.

UK correspondent Gavin Grey explains what this means for the economy.

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Episode Transcript

Speaker 1 (00:00):
Devin Gray UK corresponds with us now, Hi, Gevin, hither
heaven right? So how much trouble do you reckon the
government sin with these asylum hotels.

Speaker 2 (00:09):
Well, I do think it's going to lead now to
a whole load of councils, following an initial council and
its successful appeal in court, that other councilors will now
join in and try and get the hotels being used
to house mail asylum seekers emptied of those asylum seekers.
So what's happened a big High Court ruling which allowed

(00:29):
the council in Epping, that's Essex in southeast England to
force out the asylum seekers in one particular hotel, the
Bell Hotel, has seen over the last few weeks thousands
of people protests outside, both those in support of migrants.
It has to be said that I think the vast
majority saying we should not be having in a hotel

(00:52):
which has a license to be a hotel single mail
asylum seekers, that nobody's done any security checks on and
all this about incidentally really because an asylum seeker living
there was charged with sexually assaulting a fourteen year old
girl and another asylum seeker there Assyrian has been charged
with assault and common assault with four alleged victims in

(01:15):
that case as well as you can imagine a great
deal of all feeling by local people over those cases.
They went to court with the council to say they
shouldn't be there, and amazingly they won. Now the thing
is for the government. They're using two hundred and ten
hotels across the country housing thirty two thousand asylum seekers.
So if the courts begin to be full of councils

(01:37):
winning this battle, it's going to be very difficult for
the government to find somewhere for those people to live.
That said, this was thought to be an exceptional case
because of those two ongoing court cases relating to this
asylum seeking hotel.

Speaker 1 (01:53):
You guys worried about inflation.

Speaker 2 (01:56):
Yes, I think it is something that is climbing. So
the figure is up to three point eight percent, driven
mainly by a jump in the price of airfares. But
that means that inflation is now at the highest level
for eighteen months, and let's not forget the target of
the Bank of England is two percent. The UK therefore

(02:17):
continues to have the highest rate of inflation in the
G seven actually by quite some way. America comes second.
So what caused this? Well, I mentioned in the airfares,
but let's not forget the basic costs. Food, non alcoholic
beverages have all pushed up prices and there's been quite
a steep rise in the cost of eating out. Part
of that is said because of the government's own taxes

(02:40):
about how the employer has to pay a tax on
each employe. Now, the Bank of England does forecast inflation
will peak higher at four percent but then begin to drop.
But don't forget they just recently reduced interest rates, which
will be an inner an inflation generator out.

Speaker 1 (03:01):
Do you think it was a smart move to cut
the Space Agency?

Speaker 2 (03:05):
A very unusual move and it's kind of I think
the government's tried to put this out frankly when there's
lots of other news about and it might not quite
make the headlines, but it has. The UK Space Agency
is going to cease to exist as an independent ender tee.
It'll be coming under the Department for Science, Innovation and Technology.

(03:26):
The space sector here does generate roughly forty two billion
New Zealand dollars a year. It employs fifty five thousand
people of course we've only ever sent one person into
space tim Peak, but from the UK. But nevertheless, there
is a big program in the space sector here and
many scientists think this is a backward move, believe that

(03:47):
although the government's saying it will save money, cut duplication
in shore ministerial oversight, others saying we will lose focus
on this sector in which Britain is doing well and
growing and could lead at least to a couple of
years of stagnation.

Speaker 1 (04:01):
Gavin, thank you, appreciate it. Gavin Gray, UK, corresponding.

Speaker 2 (04:04):
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