• The core inflation rate in the United Kingdom has hit a 28-year high of 6.8%, while interest rates have declined for over 40 years.
• This rise in inflation is linked to the tightening labor market and the U.K.’s GDP surpassing 100%.
• These factors are causing investors to turn to Bitcoin as a safe haven asset.
High Core Inflation in UK
The core inflation rate in the United Kingdom has hit an all-time high of 6.8% – its highest level since 1992 – as reported by CryptoSlate. This surge in inflation has been coupled with declining interest rates for over 40 years, which has caused asset bubbles across many markets. Core inflation refers to fluctuations in the cost of goods and services, excluding items within the food and energy sectors, and remains more persistent than overall headline inflation due to a highly constricted labor market with an unemployment rate below 4%.
Rising Bond Yields
The increased core inflation has led to skyrocketing bond yields, breaking a 40-year trend line for 10-year government bond yields. As debt levels have surpassed 100% of GDP, these changes could cause serious consequences for financial markets worldwide if not addressed properly and swiftly.
Turning To Bitcoin
In this context of rising core inflation and declining fiat currency values, investors are turning towards Bitcoin as a safe haven asset that provides stability against economic turmoil or political uncertainty. Furthermore, due to its decentralized nature, it does not rely on governments or banks’ decisions or policies for its value proposition; rather it depends on its own blockchain technology protocol ensuring complete transparency and immutability of transactions made through it.
Adoption Growing Rapidly
Bitcoin adoption is growing rapidly throughout the U.K., particularly among younger generations who favor digital assets over traditional ones such as stocks or bonds given their volatility amid current economic conditions. According to recent statistics compiled by CoinMarketCap , trading activity is up nearly 65% from April 2019 levels while daily active users have grown by 45%. These figures indicate that more people are relying on crypto assets as part of their financial portfolio during times of macroeconomic stress like those seen now across Europe due to Brexit negotiations and other geopolitical issues .
It appears that continuing macroeconomic uncertainty throughout Europe will continue driving investors towards alternative digital assets like Bitcoin even more so than before once they become aware of its benefits compared with traditional investments when faced with increasing consumer prices driven by rising core inflation rates like those seen now in the U.K..