The Debt Clinic
Let's Make Your Finances Better
- Debt Management News (40)
- IVA News (9)
- Remortgage News (12)
- Loan News (19)
- Trust Deed News (3)
- Credit Check News (6)
- Latest News
- Most Popular Articles
Post New Article
Easy Product Advisor
Which solution is right for you?
Our test will give you an unbiased look at which service can help you
Inflation Rises to Record High
Official figures have revealed that inflation rose to an 11-year record high in June due to soaring food and fuel prices.
The increase in the Consumer Prices Index measure of inflation, to 3.8 per cent (compared to 3.3 per cent in May) looks likely to lower the chances of the Bank of England cutting interest rates in the near future, as it is well over the Government’s target of 2 per cent – bad news for those trying to get out of debt and those looking for cheap loans from high street banks.
The Bank has previously warned that inflation may exceed 4 per cent before the end of the year, and this is the third month in a row that figures have exceeded the Government target figure.
Meanwhile, the Retail Prices Index (RPI), which includes mortgage payments, increased to 4.6 per cent last month, said the Office for National Statistics (ONS).
The ONS figures revealed that food and fuel prices were the primary drivers for the inflationary growth, with the cost of meet, especially beef, a key factor in the rising cost of grocery bills.
Bread, eggs, fruit and cereals also experienced a sharp rise in cost, according to the statistics.
At the petrol pumps, hard-pressed motorists saw prices rise by around 5.3p a litre between May and June.
The ever-rising price of essential goods has caused concern among experts, with pensioners and young families likely to be among the hardest hit.
Outgoing Bank of England deputy governor John Gieve said: “The Monetary Policy Committee will continue to assess the balance between the risks of higher inflation from the commodity cost shock and the downside risks to output from the credit crunch.
“There are signs that the tightening of credit conditions is beginning to affect both consumption and investment. Most importantly, the sharp increases in commodity prices are squeezing real take-home pay which is bound to impact on consumption at some point.”
Loan News posted on 06 August 2008
