Going Up! UK Inflation is Rising
The UK's cost of living is going up again.
The official inflation figures for October, released today, confirm what the British public already know: day-to-day costs are rising.
The CPI, or Consumer Prices Index, rose from September's 1.1% to 1.4% in October. The RPI, or Retail Prices Index, jumped dramatically by 0.6%, the largest single-month increase since 1990. However, it's still negative at -0.8%.
The RPI includes housing costs and mortgage costs, so is regarded by many as being more realistic.
Last week the Bank of England predicted a period of volatility in the inflation rate, with a short term rise as we enter 2010.
That the rise is now official won't cheer a public struggling on static or reduced incomes. Pay increases are a distant hope for many people seeing prices going up at the petrol pump and in stores. On 1 January the cost of almost everything will jump as VAT returns to 17.5%.
The increase in the cost of living is not something that people want to hear about. But what concerns householders more is what could follow in its wake: the potential for interest rate rises that will take another chunk out of the already-stretched household budget.