A number of experts have expressed their concern over the UK's soaring inflation rate, following the announcement of the latest figures this week.
The Consumer Prices Index (CPI) rose to 5.2% in September, the joint-highest rate of inflation since the introduction of that measurement in 1997. The Retail Prices Index – which takes mortgage repayments into account – rose from 5.2% to 5.6%.Reacting to the data, Brendan Barber, general secretary of the Trades Union Congress, highlighted the strain that rising prices will place on households. "The cost of living is now rising three times faster than wages – squeezing people's living standards even tighter. But instead of standing up for hard-pressed families, the Government is making things worse by hiking VAT and cutting vital tax credits.
"Ministers must do all they can to promote a plan B based on jobs and decent wages," continued Mr Barber. "We cannot build a sustainable economic recovery on the back of people getting poorer."
Other commentators, whilst acknowledging the hardship faced by families, adopted a slightly more optimistic outlook. Said Ian McCafferty, chief economic adviser for the Confederation of British Industry, "The sharp rise in consumer price inflation to above 5% was to be expected given rising utility bills. This will put household budgets under further pressure.
“We hope that this high rate of inflation will be short-lived. We expect inflation to ease back significantly through 2012 as the upward pressure exerted by this year’s VAT rise and commodity price increases fades away.”