Inflation increase causing money worries?

The consumer price index (CPI) has increased again, which means that inflation may cause people financial worries.

According to Moneyfacts, this means that a person needs have an account paying 4.63 per cent in order to break even, with only 20 options to choose from for the basic rate tax payer.

Darren Cook, spokesman for the organisation, noted that the rise in inflation will make it hard for individuals to make any return from their income.

“A spiralling inflation rate, which could be aggravated by the predicted rise in VAT can only point towards a bank base rate increase sooner rather than later,” he added.

Mr Cook stated that the dual effects of tax and inflation will leave many of these people struggling to cope.

Mike Fosberry, president of the Personal Finance Society, recently remarked that the human element of the recession is set to continue as individuals face up to debt concerns.

By Rory Mallon