The Guardian view on the economy: soaring prices and plunging wages spell conflict ahead | Editorial

The news this week that inflation has hit a 40-year high even as wages fall at their fastest rate in two decades is sobering, yet sadly unsurprising. You need not be an economist to know how much prices have been going up this year, from the petrol pump to the supermarket checkout to direct debits. And while inflation at 10% is a remarkable figure, it is set to go even higher. Unless the government acts on energy bills, when the cap rises by a predicted 80% on 1 October, inflation will soar again. Analysts expect prices for gas and electricity to keep on increasing well into the new year. And where energy prices go, so go the costs for everything else, from food to clothes to transport.

The UK is not the only country in this mess, but its position is the most precarious of any in the…

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