AgnesIO
19-10-2016, 08:42 AM
UK inflation at 1% as price of clothes and fuel rises
http://ichef.bbci.co.uk/news/660/cpsprodpb/F1FA/production/_91964916_clothesgetty.jpg
http://www.bbc.co.uk/news/business-37688593
Rising prices for clothes, hotel rooms and petrol have led to the highest rate of inflation in nearly two years, official figures show.
Inflation rose to 1.0% in September, up from 0.6% in August, the Office for National Statistics (ONS) said (https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/sept2016#retail-prices-index-rpi-and-rpij).
Clothing saw its biggest price rise since 2010 and fuel, which was falling a year ago, was also more expensive.
However, the ONS said there was "no explicit evidence" the weaker pound was the reason for higher prices.
So, what does this mean for you? The Bank of England's inflation target is 2%, so at first glance you might think "great!". Obviously this rise is a result of leaving the EU, the crash of the pound etcetera (despite the ONS saying there is no explicit evidence - you don't see rises like this for no reason).
Now, ironically, many of those who voted to leave the EU are older people and also the poorer working person. Who does inflation hit most? That's right, older people (eg. pensioners) and the poorer working man. Ultimately, small price increases don't affect me - I don't notice if my weekly shop goes up by a few pounds. However - those with very limited disposable income will feel inflation, particularly when unions have far less power than they used to so significant pay increases simply don't happen anymore.
The negative consequences seen over the past few months (even if they are 'short term' like so many people claim), are going to hit the poorer man first. Inflation is also terrible news for those of us with £45,000 student loans, as the interest you pay is directly related to the RPI (currently 2% - a small increase on the month before).
Of course, many are big supporters of inflation, and it can indeed be good - as long as wages are rising at a similar rate. If not, you'll simply end up with higher costs, and therefore less money for almost everyone.
Thoughts?
http://ichef.bbci.co.uk/news/660/cpsprodpb/F1FA/production/_91964916_clothesgetty.jpg
http://www.bbc.co.uk/news/business-37688593
Rising prices for clothes, hotel rooms and petrol have led to the highest rate of inflation in nearly two years, official figures show.
Inflation rose to 1.0% in September, up from 0.6% in August, the Office for National Statistics (ONS) said (https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/sept2016#retail-prices-index-rpi-and-rpij).
Clothing saw its biggest price rise since 2010 and fuel, which was falling a year ago, was also more expensive.
However, the ONS said there was "no explicit evidence" the weaker pound was the reason for higher prices.
So, what does this mean for you? The Bank of England's inflation target is 2%, so at first glance you might think "great!". Obviously this rise is a result of leaving the EU, the crash of the pound etcetera (despite the ONS saying there is no explicit evidence - you don't see rises like this for no reason).
Now, ironically, many of those who voted to leave the EU are older people and also the poorer working person. Who does inflation hit most? That's right, older people (eg. pensioners) and the poorer working man. Ultimately, small price increases don't affect me - I don't notice if my weekly shop goes up by a few pounds. However - those with very limited disposable income will feel inflation, particularly when unions have far less power than they used to so significant pay increases simply don't happen anymore.
The negative consequences seen over the past few months (even if they are 'short term' like so many people claim), are going to hit the poorer man first. Inflation is also terrible news for those of us with £45,000 student loans, as the interest you pay is directly related to the RPI (currently 2% - a small increase on the month before).
Of course, many are big supporters of inflation, and it can indeed be good - as long as wages are rising at a similar rate. If not, you'll simply end up with higher costs, and therefore less money for almost everyone.
Thoughts?