- 12
- Aug
The national rate of inflation continued to rise throughout July, new figures from the Office for National Statistics (ONS) have shown.
According to the group, the consumer price index (CPI) – a popular benchmark for UK inflation and the government’s target measure – soared to 4.4 per cent, up from 3.8 per cent in June. Meanwhile, the retail price index was found to have increased to five per cent, up from 4.6 per cent in June. The government’s official inflation target is pegged at two per cent, with the ONS noting that the largest upward pressure away from this figure came from increases in the price of food and non-alocholic beverages. Bread, meats, cereals and vegetables were said to have been large contributors to the overall rises in this area.
Meanwhile, transport costs were also shown to have escalated, with typical petrol prices increasing by 1.2 pence per litre over the course of the month. Last year, prices fell by 0.4 per cent during the same period. So too, the costs of eating in restaurants and staying in hotels also increased during July.
The ONS noted that the only downward pressure on the CPI came in the entertainment sector, where computer games and pre-recorded DVDs were found to have fallen in price slightly when compared to 2007 figures.
For those who have been struggling to keep on top of their finances as inflation pushes prices higher, taking out a debt consolidation loan may prove an effective way to stop spending commitments from escalating further. In spreading out repayments on items such as mortgages, utility bills or existing personal loans, people may find they are left with more money each month to pay for essential items such as food and fuel.
Commenting on the announcement, independent financial adviser Moneyfacts reminded consumers of the detrimental effect that rising inflation could have on their savings. It noted that for those who have money put away in a savings vehicle that offers returns lower than 4.4 per cent, they will find that inflation is eroding not only the returns on investment but also the initial capital that was putting into the account.
The group explained: “With inflation predicted to be over five per cent before the end of the year, many savers are going to be adversely affected. Savers need to make sure they review their existing arrangement and switch to best-buy accounts paying rates higher than inflation. In recent months, many institutions have increased rates to tempt savers in order to help their balance sheet, but savers will be wishing that the monetary policy committee decides to increase the base rate at the next meeting, to counter the damaging effects inflation is having on the economy.”
For those who have been unable to meet rising costs on a shrinking budget, taking out a consolidation loan may prove an effective way to spread spending over a longer period and reduce the chance of entering arrears or falling further behind on other payments. Taking out a debt consolidation loan may be of particular interest to the 82 per cent of people identified in a recent Legal & General study whose outgoings are said to be in excess of their incomes.
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