More than any other advanced economy, the UK has been squeezed by sharply higher prices.

But new data shows that inflation may be starting to fall.

So has British inflation finally turned a corner?

The UK faces a real confluence of shocks that we've seen in other regions.

We have core inflation still close to 6% by the end of the year,

which is quite a bit above where we see it in both the US and the year area.

I'm Allison Nathan, and this is Goldman Sachs exchanges. To help break down the drivers behind the UK's inflation problem, its implications for the economy and markets, and the impact

for consumers and investors, I'm speaking with my colleagues in Goldman Sachs research,

Yari Stain, our chief European economist, and George Cole, had a European rate strategy.

Yari, George, welcome back to the program.

Hi, Allison.

Thank you.

So we have talked so much on this podcast about the inflation problem that most of the developed

world has been grappling with but the UK has stood out in terms of the severity

of its inflation problem. Why is inflation so high, Yari?

Well, it's certainly true that the UK stands out here.

Headline inflation is at 8%, core inflation around 7,

so that's notably above where both the US and the Euro area are now.

I would say the big picture reason is effectively that the UK faces a real confluence of shocks that we've seen in other regions. So basically in the

US you have a classic access demand issue, a tight labor market that's pushed up

wage growth and inflation and the Fed basically needs

to lean against that. In the euro area you've seen an enormous energy supply

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