By Max Clarke
Persistent inflation will cost British households an extra £630 a year simply to maintain the same lifestyle in 2011 that they enjoyed for 2010, research shows.
The consumer price index (CPI) of inflation for January was posted at 4.4%- far in excess of the Monetary Policy Committee’s 2% target. A 4.4% increase in household expenditure equates to an additional £39 billion simply to match expenditure of the previous year.
“The latest CPI rate of 4.4% will continue to hurt people financially in retirement,” commented Aston Goodey, Sales and Marketing Director of MGM Advantage, who carried out the research. "The price of goods is rising at an alarming rate and coupled with the fact that people are living much longer, means many people in retirement are finding it more difficult to survive financially.”
The British Chambers of Commerce (BCC) say the figure is not surprising, and predict it will rise further:
“These figures are slightly worse than those expected by most analysts, though an increase in inflation to 4.4% is not entirely surprising. In the face of higher taxes, increased utility bills and surges in energy and food prices, consumer price inflation could increase above 4.5% before it stabilises,” David Kern, Chief Economist at the BCC, said.