Inflation falls but consumers still feel financial pain
As inflation falls Channel 4 News’ Economics Editor Faisal Islam says it is far too soon to be celebrating.
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With inflation rising to match record highs, Channel 4 News looks at the effect on the economy and consumer and considers if there are any reasons to be cheerful.
Inflation rates rise again as increases in the price of gas and electricity, combined with higher clothing costs, continue to pile pressure on household incomes.
Record discounts in the summer sales help deliver a surprise fall in inflation, which economists say could see the Bank of England freezing interest rates until spring 2012.
Official figures reveal that May’s inflation rate remains at a two and half year high, as research shows that the poorest have been worst hit by rising food and drink costs.
Chancellor tells Channel 4 News the VAT increase – identified by the Bank of England as a contributing factor to today’s CPI increase – was essential in dealing with the budget deficit.
Inflation hit a two-and-a-half-year high last month, jumping to 4.5 per cent from 4 per cent in March. The rise is blamed on Easter travel costs, together with higher duty on alcohol and tobacco.
The Bank of England has kept interest rates on hold at 0.5 per cent. The decision to maintain record low rates was widely expected after a set of gloomy economic indicators.
As inflation falls Channel 4 News’ Economics Editor Faisal Islam says it is far too soon to be celebrating.
Economists tell Channel 4 News interest rates for home owners may stay on hold until the end of next year as inflation dropped unexpectedly last month to 4 per cent.
As Chancellor George Osborne puts the final touches to his Budget, inflation rises to its highest level for 28 months. It’s another hit for the “misery index”, as Economics Editor Faisal Islam writes.
As inflation rises to 4 per cent, Economics Editor Faisal Islam says an interest rate increase is likely in the next four or five months.
The rising cost of fuel and food caused inflation to hit 3.7 per cent in December, up from 3.3 per cent in November. As Faisal Islam reports, this could lead to a rise in interest rates.
Britain is facing an “inflation problem”, the Conservative grandee Lord Heseltine has told Channel 4 News, hinting that the Bank of England should sort it out by raising interest rates.
A record surge in food and clothing costs has driven up inflation for November, as Gary Gibbon writes that parts of the government are still looking at the potential for a “double-dip” recession.
The question is: at what point does temporary become more enduring? If VAT goes up again on 22 June, that will provide another boost to CPI inflation, writes economics editor Faisal Islam.