industry

Pound sterling ROCKETS as UK inflation SOARS above official predictions for August


soared on Monday after it was revealed that UK inflation has risen by 2.7 percent to its highest level in six months, despite economists predicting a Consumer Prices Index rate of 2.4 percent.

In data released by the Office for National Statistics, the rate of Consumer Price Index inflation had risen to 2.7 percent, compared to 2.5 percent in July.

Mike Hardie, Head of inflation at the ONS, said: “Consumers paid more for theatre shows, sea fares and new season autumn clothing last month.

“However, mobile phone charges, and furniture and household goods had a downward effect on inflation.

“UK house prices continued to grow but at their lowest annual rate for five years, driven again by a fall in London.

“The housing market saw strong growth in the North West, South West and West Midlands.”

Simon Longfellow, Head of stepstoinvesting.com, also said the increase in inflation will be “no surprise to consumers” following the Bank of England interest rate rise last month, which was implemented to soften the blow on emerging price pressures.

Mr Longfellow said: “However, they mustn’t be fooled into thinking they’ll see much of a difference to their money. Remember, inflation remains higher than cash savings rates and even with the rate rise it could be months before they benefit.

“And that’s providing their bank actually pass the rate on. Struggling savers looking to secure a return on their money, should think about looking at alternative options rather than letting their money sit in cash accounts decreasing in value.

“In fact, UK savers saw the buying power of their money fall by £30.3bn last year, the equivalent to £1,147 per household. This should serve as a stark reminder of the need to know about other options.

“With investing, being aware of the risks and benefits involved can provide consumers with the confidence to be able to make decisions that could help them benefit from higher yielding alternatives.”

Against the euro, the pound was up 0.1 percent to 1.12.



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