Yet again, inflation has surged past expectations – this time hitting 5.1 per cent in November, a ten-year high, up from 4.2 per cent in October. This threatens a political crisis as well as tough economic times: unless inflation is quelled, next year will be one of declining living standards for most people. Anyone whose pay is not rising by at least five per cent will, in effect, feel like they’ve experienced a pay cut.
It was assumed that five per cent would be about as high as inflation would go but all this is proving hard to predict. This has gone past the Bank of England’s peak forecast, which wasn’t expected to be hit until next year.
Anyone whose pay is not rising by at least 5 per cent will, in effect, feel like they’ve experienced a pay cut
The increase has been largely driven this month by price hikes in transport (motor fuels and second-hand cars), as well as increases in housing and ‘household services’ – costs that are guaranteed to be felt by the public on a daily basis.
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