An index that compares how expensive it is to move freight from Shanghai to Europe shows how the cost has risen again - with the ongoing crisis in the Red Sea to blame. Analysts are concerned it could cause the rate at which prices of goods on UK shelves go up to rise again.
The price of shipping has reached an 18-month high - threatening to impact the falling inflation rate. It is now more expensive to ship a typical container on a key shipping route than when Houthi militants first started attacking boats in the Red Sea late last year to prevent ships docking in and exporting from Israel. An index that measures the average cost of a 20ft container being shipped from Shanghai to Europe - and is the most widely used measure of freight cost - has reached $3,949 .
Why it matters It was this wave of supply chain woes that brought about part of the first shock to the economy that caused inflation, the rate of price rises, to go up. The economy has recovered in large part from shocks - including the energy price hikes brought about Russia's invasion of Ukraine - which resulted in inflation reaching a 41-year high of 11.1% in October 2022. While inflation has dropped significantly - to 2.
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