10.1% UK inflation could impact crypto growth in 2023
Recent reports indicate that the inflation rate in the U.K. stood at 10.1% in January this year, remaining at double-digit figures.
UK inflation is relatively high
Inflation rates have been massively problematic worldwide, especially since mid-2022. The rates surged, with the U.K. recording double figures for the first time in June 2022, where the rate hit 10.1%.
However, reports show that in January 2023, the inflation rates in the region still stand at double figures of 10.1%, slightly higher than many other countries. This figure is lower than the rate of 11.1%, which was recorded in October 2022 for the first time in 41 years.
Moreover, it’s also a slight drop from December’s recorded inflation of 10.5%. Analysts originally forecasted that there would be a small slowdown in inflation to about 10.3%.
Data suggests that rising food prices mainly drove CPI between August and September. For instance, some suggest that the Ukrainian invasion created a problem in the grain business, with its prices surging and dairy prices surging last year.
In general, reports indicate that the inflation was also relatively high in other countries like Germany, 9.2%, France % and the US, 6.4%.
More crypto adoption or more price instability?
The inflation rate may impact the bitcoin community in the U.K. Some analysts note that the Bank of England could increase interest this year, forcing inflation down while strengthening the pound against the dollar.
Analysts speculated that U.K. interest rate hikes could cause inflation in USD, forcing the FED to act. This back and forth will affect unstable markets like bitcoin and crypto. As such, bitcoin investors using USD or pound will likely suffer due to fiat instability.
Furthermore, bitcoin and the crypto market could easily continue recording price plunges like noticed last year. Other analysts suggest that the inflation fights could bring some positive developments in crypto.
Bitcoin has been widely appraised as an inflation hedge. Some U.K. pro-bitcoin analysts believe that the policies placed by BOE should trigger more people to learn about money and how BTC could solve inflation. As such, inflation could trigger more U.K. citizens to invest in crypto.
Other crypto analysts foreshadow the demise of the current fiat system and possible replacement with BTC. Some note that the massive printing of money during the lockdowns has accelerated the end of the traditional money system.