Inflation rise may leave more with debt management issues

The Consumer Prices Index (CPI) measurement of inflation has hit its highest level in three years, new figures have revealed today (October 18th).

The Consumer Prices Index (CPI) measurement of inflation has hit its highest level in three years, new figures have revealed today (October 18th).

In September the rise in the cost of living jumped to 5.2 per cent, the Office for National Statistics (ONS) revealed, matching the level of September 2008.

Meanwhile, Retail Prices Index inflation – which unlike CPI includes house prices – was up to 5.6 per cent, the highest level since the 5.8 per cent figure recorded in June 1991.

According to the ONS, the situation was chiefly caused by the recent hikes in gas and electricity costs announced by the main energy suppliers, with transport and communications costs also a factor.

The cost of clothing and footwear was one factor acting as a downward influence, the report indicated.

With the cost of living going up, squeezed consumers may find it even harder than before to meet their monthly repayments, with the expense of paying off credit card and loan debt increasingly having to be met from dwindling resources as other costs go up.

Debt management plans may be useful in helping people to stretch their payments over a longer period and thus make them more affordable.

This may help customers see themselves through the hardest period of inflation, which the Bank of England has predicted would be the later months of 2011.

Its most recent Quarterly Inflation Report tipped CPI to hit five per cent on the back of rising utility prices, but it also said inflationary pressures will then fall back in the months ahead.

By James Francis
 

Tell others:

shortlink

By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.

Close