The Office for National Statistics (ONS) has announced that inflation has reached the giddy heights of 2.9%, the highest it’s been since 2013. It’s the third rise since the start of 2017 when inflation stood at 1.8%. It then rose and steadied at 2.3%, before rising to 2.7% in April, only to be topped by May’s 0.2% increase.
The blame for increasing levels of inflation has been firmly placed at the door of Brexit and the devaluing of the pound that followed the decision to leave the EU. To make matters worse, the ONS has also released figures that show wages in real terms have fallen by 0.4%.
Ultimately, it means that British consumers will feel the pinch when it comes to everyday bills, shopping and even holidays. May’s inflation increase has chiefly come from the rise in cost of toys, clothes, imported computer games and foreign travel – the average package deal was up 0.6% compared to the same period last year – bad luck sunseekers. It’s not all doom and gloom though as fuel costs fell, as did the cost of travelling by sea and air – so although your package holiday might cost you more, ‘flights only’ might be a steal.
So, what’s the prognosis for the future? That’s right – you’ve guessed it – number crunchers and financial boffins reckon that inflation will continue to rise but will peak by the end of 2017 – bet you can’t wait for that.
In the meantime, cash strapped households will need to watch the pennies – but being careful doesn’t mean cutting back; it just means getting better value on the household expenses that really matter. So, make sure you get a great deal for your money when it comes to car, home and pet insurance; and let’s not forget all the essentials such as energy, broadband, phone and TV.
But that’s not all, we’ve got a dedicated money hub so you can really get to grips with your finances. We can help by giving you the lowdown on savings accounts and cash ISAs, as well as telling you how it is when it comes to committing yourself to a loan or credit card, so make the most of your money and comparethemarket.com.