Inflation in new surge

Those having problems with debt may be set to struggle even more after it was revealed the rate of Consumer Prices Index (CPI) inflation has jumped again.

Data from the Office for National Statistics (ONS) produced today (March 22nd) showed the CPI rate jumped from four per cent to 4.4 per cent last month.

And the Retail Price Index – which unlike CPI includes mortgage costs – rose from 5.1 per cent to 5.5 per cent.

Domestic fuel was again a major factor in the rise in prices, although this was not so much because of a 0.4 per cent hike in prices between January and February this year as a 2.8 per cent fall in such costs during the same period in 2010.

Clothing and footwear, miscellaneous services such as financial services and the cost of recreational and cultural activities were also identified as major contributors, while alcoholic drinks and tobacco were the biggest downward influence on CPI.

The overall picture is one that could leave some increasingly pressurised and those who have large debts may consider individual voluntary arrangements.

And homeowners may feel the pinch soon if the Bank of England’s Monetary Policy Committee reacts to the news with a base rate rise soon.

Evidence that some people are responding to the effects of higher prices and falling real-terms income by trimming their budgets.

The first-ever survey of mothers by Family Investments was published this week and revealed 47 per cent are planning to trim their domestic spending this year, with the average reduction being by £386.76.

By Joe White