Thursday 19 October 2017

Inflation Rises to Five Year High

Inflation increased to three percent in September, the highest in five years. 
The Resolution Foundation have warned that this rise will hit low and middle income families standard of living; a working family with two children could lose  up to £315 pounds a year. 

Food and transport are the main drivers of rising costs  rising by 0.8% since last year. Benefits are currently frozen for the next four years, so an increase in inflation could hit recipients very hard.
The Institute for Fiscal Studies said the figure highlighted the risk of setting benefits rates far in advance, with recipients set to lose out as an unintended consequence.
A spokesperson said:
“This morning’s inflation figure, taken together with the latest inflation forecasts, means that the four-year freeze on most working-age benefits is now expected to cut the benefits of 10 million families by £450 a year in real terms – up from £320 back when the freeze was first announced. The extra £130 loss is not the result of any deliberate decision by the government – it is the consequence of inflation being higher than was expected when the policy was set.”
Scottish Chambers of Commerce CEO Liz Cameron said: “The figures today continue to highlight the divergence between cost of living and real wages which characterises the fragility of the UK economy.  
“Speculation continues to increase around the prospect of an interest rates rise in November, yet the inflation figures emphasise the uncertainty this would cause to both Scottish business and the UK economy as a whole.
“In the current climate, while real wages are falling, the MPC should continue to hold steady on interest rates.
“It is critical that the measures provided in the Chancellor’s upcoming Autumn Budget are clearly designed to boost business confidence and increase investment. 
“Ensuring a stable environment for business growth will contribute to rising wages, and a subsequent rise in consumer confidence.”
Source: Holyrood 

No comments:

Post a Comment