Inflation- help me out please!

[Helpmeoutforamoment]

I need someone to explain to me: inflation is high. It seems to me that it is high because of the cost of fuel which impacts everything. Interest rates are raised to supposedly lower inflation, but in reality interest rates have no impact on fuel costs. Fuel cost, we are told are raised by the increased cost of gas due to the war in the Ukraine, but energy companies, despite this, seem to be achieving record profits.

How does this work?

Increasing interest rates normally works by stopping us spending so much, but because daily stuff like heating and petrol are so high, we are forced to spend more (or freeze to death or not go to work) and take on more debt due to increased energy costs.

So surely this is a different type of inflation than historic events?

Therefore interest rates increasing will have no other impact than making the poor poorer, in terms of increased cost of borrowing, mortgages etc, and making the rich, who have money invested in said oil companies, or in savings accounts, richer.

I feel I'm missing something as I don't see how the current plan gets us out of this?

The current plan being to increase interest rates whilst keeping wages low. I see how this would work with "normal" inflation but not in the situation we are currently in!

The cost of fuel affects absolutely everything.

Everything that is manufactured and/or transported is subject to the higher fuel costs

That's my point. The usual way we reduce inflation is by increasing interest rates to stop people spending so much, and that's what the government are doing. But if we are forced to keep paying high fuel costs, how is increasing interest rates going to reduce inflation?

Because it will reduce demand for manufactured goods, which in turn reduces the demand / price of energy.

Fuel cost, we are told are raised by the increased cost of gas due to the war in the Ukraine, but energy companies, despite this, seem to be achieving record profits.

How does this work?
When prices are high the same percentage margin will generate much higher profits.

Therefore interest rates increasing will have no other impact than making the poor poorer, in terms of increased cost of borrowing, mortgages etc, and making the rich, who have money invested in said oil companies, or in savings accounts, richer.

I feel I'm missing something as I don't see how the current plan gets us out of this?

Gets us out of what? The government wants to make rich people richer at the expense of everyone else, that's what they do. They ask the Bank Of England to enact policies to do that (they pretend it's about inflation but it isn't).

Fuel costs are a big cause of inflation for sure. However, as I understand it, the argument for the rise in interest rates is also about maintaining the value of the pound. Higher interest rates raise confidence in the pound, thus elevating it's value, this is particularly important as US interest rates have risen . If interest rates in the UK remain to low, the pound becomes devalued further. If the value of the pound falls, buying goods internationally becomes more expensive and inflation rises... or so the argument goes.

There are three F’s to inflation.

Fuel

Fertiliser

Food

the gas issue and the interest rate issue are two separate issues.
fuel costs are high (forget about the profit making of companies)
i'm not micro or macro economic star but:
the interest rate rise has to do with covid, money the government used to fund the disaster, and the decreased worth of the gbp.

This is a good point - we basically have to do what the US does.