The New StatesmanThe New Statesman

The age of greedflation

By Will Dunn

31 May 2023 · 14 min read

informed Summary

  1. Inflation is driven by a combination of factors, including energy shocks, supply chain disruption, and greed.

The month of May was supposed to bring good news for the government: a lower energy price cap from ­Ofgem, a more optimistic verdict on our economy from the International Monetary Fund and a return to single-digit ­inflation. These things were delivered, and Rishi Sunak announced: “The plan is working.” The bond markets, however, disagreed.

On 24 May, as the Chancellor Jeremy Hunt congratulated himself on having “acted decisively to tame inflation”, bond traders looked at the Office for National Statistics data and began a rapid sell-off of UK government debt. Gilt yields – which reflect the amount it costs the UK to borrow from financial markets – rose at a speed seen only twice in recent decades: following Liz Truss’s disastrous mini-Budget, and during the financial crisis of 2008.

Sign in to informed

  • Curated articles from premium publishers, ad-free
  • Concise Daily Briefs with quick-read summaries
  • Read, listen, save for later, or enjoy offline
  • Enjoy personalized content