Inflation Rises Adding Further Pressure to Budgets
The annual inflation is up from January to 4.4 percent in February, the latest consumer prices index (CPI) reveals.
The costs of keeping homes heated following the recent energy price hikes, and the increasing expense of new clothes are the biggest drives behind the increase, the Office for National Statistics showed.
The annual inflation recorded by the retail prices index (RPI) is 5.5 percent, up from 5.1 percent in January.
The CPI rise of 0.7 percent between January and February is 0.3 percent higher than the rise experienced a year ago.
Alcohol and tobacco was the largest downward pressure to inflation between January and February, falling by 0.1 percent.
Overall, clothing and footwear prices rose by 3.6 percent which is the largest monthly movement in this area for a January to February period.
Bread and cereal prices saw the largest upward effect in the food and non-alcoholic area, rising by 2.9 percent. Meat, mineral waters, soft drinks and juices closely followed.
Transport prices rose by 0.8 percent – the biggest pressure coming from fuels and lubricants as pump prices rose by 1.4 percent following rises in crude oil prices.
The Cost of Living
According to new figures from the Institute for Fiscal Studies, real household incomes have fallen over the last three years by 1.6 percent, making the average household around £360 a year worse off.
Incomes are now 6 percent lower than most households might have expected them to be at this stage if they had risen by about 1.6 percent each year as usually seen.
A further 16 million Brits are expected to experience a pay freeze this year, too, with three quarters of those whose incomes have received a boost, have risen below the rate of inflation, uSwitch research revealed.