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Is inflation really a problem?

As we see UK inflation rise to 3.4% in March it is easy to assume that inflation is set to become a major problem for the UK government and the UK economy. However, the vast majority of the increase in March has been attributed to a rise in the cost of fuel and the knock-on effect this has to the cost of food, goods and services. So what can the UK government do to reduce the pressure on inflation?

In one simple foul swoop the UK government could take the pressure off the cost of fuel in the UK by reducing the amount of tax paid to the government. The vast majority of the cost of a litre of petrol finds its way back to the taxman and when you also consider that the government also taxes oil producers, surely enough is enough? But what are the chances a response from the UK government?

The chances of response to this matter from UK government are effectively nil! There is no way that the government can or would reduce the tax intake on a litre of petrol because this would set a precedent for the future and also reduce government income at a time when money is needed for many areas of the government budget. Compare this to a banking tax and you decide whether this is fair?

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