UK Inflation Remains At Five Year High
UK Inflation remained unchanged in October, staying at the five year high of 3%, the Office for National Statistics has reported.
A rise to 3.1% had been speculated upon, however, higher food prices were offset by lower fuel costs. The Bank of England had expected a Consumer Prices Index peak of 3.2% this autumn. The official target for inflation is 2%, a figure which was surpassed in March 2017.
The Bank of England raised interest rates for the first time in ten years at the start of November, increasing from 0.25% to 0.5%, partly in reaction to the level of inflation, which hit a five and a half year high of 3% in September 2017.
One of the factors behind the rise in inflation has been the fall in the value of pound, which declined after the Brexit referendum in June 2016. This has increased the cost of imports to the UK. It has now been suggested that the UK could be turning a corner, with Sainsbury’s chief executive Mike Coupe telling the BBC we are “probably through the worst” of food price rises.
Despite that prediction, October’s figures show that food and non-alcoholic drinks rose at an annual rate of 4.1% – that’s the highest figure since September 2013.
The added cost of inflation, at a time when wage growth is stagnant, and alongside the pressure on mortgage-holders from rising interest rates, is causing a squeeze on personal finances. One potential solution to any Savings Gap, is to consider a Stocks & Shares ISA, where your money has the potential to beat inflation and outperform low interest rates found in Cash ISAs.