By Marcus Leach

The latest inflation figures, which are due to be released today (Tuesday), are expected to hit a three year high.

This in turn will leave the government with an increased bill for state benefits as the squeeze on household incomes continues.

The Consumer Price Index (CPI) for September will be used by the government to set the rise in the basic state pension next April. Whilst this will bring light relief for the country's pensioners, it will continue to put a strain on the public purse.

Based on City forecasts for CPI of 4.9%, the basic single state pension will increase by £5 to £107.15 a week, while the joint state pension will increase by £8 to £171.35.

Other benefits, such as jobseeker's allowance and income support will also be calculated using the CPI. This could see the jobseeker's allowance rise to £70.81 a week.

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