According to the Office for National Statistics (ONS), inflation rose to 1 per cent in September, up from 0.6 per cent in August. This is the highest inflation rate in nearly two years, and it is mostly attributed to the rising prices of petrol, hotel rooms and clothing. There is no explicit evidence that the weaker pound was to blame.
If inflation continues to rise, it would most noticeably affect the households who rely heavily on benefits and tax credits, which are frozen until 2020 and won’t account for rising costs. And if inflation rises to 2.8 per cent in the next few years, more than 11 million households will be worse off by an average of £360 per year. Lower income families, who receive more in benefits, will feel a bigger hit to their wallets, losing approximately £470 per year.
This news comes at a time when many families are getting ready for festive season purchases. To help counter rising prices, the following simple guidance can help cut costs as Christmas draws near. (more…)