Anyone who spends any time at all in a supermarket or a petrol station will view the latest published inflation rate of 2.2 per cent with a mixture of derision and disbelief.
Such scepticism is entirely understandable, because the cost of fuel and food – the essential components of most people’s weekly spend – is rising at a much greater rate. New figures from the Office of National Statistics show that fuel inflation is running at 19.3 per cent – the highest since records began in 1997. Meanwhile, inflation in the cost of food is running at 6.1 per cent, but at an alarming 15.4 per cent for such staple items as milk, cheese and eggs.
The low headline rate of 2.2 per cent is due to slashed January sale prices for clothing, shoes and luxury items, such as plasma TVs. Not, on the whole, everyday purchases.
Food price inflation is likely to climb still further over the coming months, as food producers pass on their own increasing costs to consumers.
The true rate of inflation for most average families is therefore considerably higher than the Government would care to admit. There will consequently be little scope for many more cuts in Bank of England base rate over the coming months.
All in all, a deeply troubling outlook for the British economy and worrying political prospects for the Government.
Such scepticism is entirely understandable, because the cost of fuel and food – the essential components of most people’s weekly spend – is rising at a much greater rate. New figures from the Office of National Statistics show that fuel inflation is running at 19.3 per cent – the highest since records began in 1997. Meanwhile, inflation in the cost of food is running at 6.1 per cent, but at an alarming 15.4 per cent for such staple items as milk, cheese and eggs.
The low headline rate of 2.2 per cent is due to slashed January sale prices for clothing, shoes and luxury items, such as plasma TVs. Not, on the whole, everyday purchases.
Food price inflation is likely to climb still further over the coming months, as food producers pass on their own increasing costs to consumers.
The true rate of inflation for most average families is therefore considerably higher than the Government would care to admit. There will consequently be little scope for many more cuts in Bank of England base rate over the coming months.
All in all, a deeply troubling outlook for the British economy and worrying political prospects for the Government.
1 comments:
There is an ill wind blowing down the high streets, a sure sign of things to come.
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