Inflation as high as 10% for some

Based on article from The Telegraph, 15 January 2007

The Office for National Statistics (ONS) has released figures that show that inflation may be as high as 10% for some families due to very high mortage bills and utility bills, which have raised the cost of living considerably.

Click here to go to the ONS website to work out what rate of inflation is for you. Higher costs of living, which has been shown by this calculator means that people have found their disposable incomes eroded - it is now at a 2 year low.

Pensioners may have found their inflation be at around 9% due to rising energy bills middle class families could see their costs of living rise by 5.8%.

However, this calculator has been met with some critiscism as it does not include education fees, which takes a large sum of money for many families such as school and university fees.

This has come in the light of the Bank of England's decision to raise interest rates by a quarter point to 5.25%, in an attempt to curb inflation which at CPI is running at 2.7% and at RPI, which includes the price of mortages, at 3.9%. Many expect the rate of inflation to have breached the 3% upper limit, which could explain the Bank's decision to raise the base rate. If inflation does rise over 3%, the Governor, Mervyn King, will have to write a letter to the Chancellow, Gordon Brown, explaining why this has happened.

Links:
Rate of inflation at 10pc for some families - The Telegraph
Inflation calculator - Office for National Statistics