THE UK’s rate of inflation jumped to 1.5% in the 12 months to April due to rising household bills, clothing prices and fuel costs.
It comes after the Office for National Statistics (ONS) said the Consumer Prices Index (CPI) hit 0.7% in March.
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On a monthly basis, inflation rose by 0.6% in April 2021, after a 0.3% increase in March.
ONS Chief Economist Grant Fitzner said: “Inflation rose in April, mainly due to prices rising this year compared with the falls seen at the start of the pandemic this time last year.
“This was seen most clearly in household utility bills and clothing prices.
“As the price of crude oil continues to rise, this had fed through to the cost of motor fuels, which are now at their highest since January 2020.”
How inflation affects your finances
INFLATION is a measure of the cost of living. It looks at how much the price of goods, such as food or televisions, and services, such as haircuts or train tickets, has changed over time.
Usually people measure inflation by comparing the cost of things today with how much they cost a year ago. The average increase in prices is known as the inflation rate.
The government sets an inflation target of 2%.
If inflation is too high or it moves around a lot, the Bank of England says it is hard for businesses to set the right prices and for people to plan their spending.
High inflation rates also means people are having to spend more, while savings are likely to be eroded as the cost of goods is more than the interest we’re earning.
Low inflation, on the other hand, means lower prices and a greater likelihood of interest rates on savings beating the inflation rate.
But if inflation is too low some people may put off spending because they expect prices to fall. And if everybody reduced their spending then companies could fail and people might lose their jobs.
See our UK inflation guide and our Is low inflation good? guide for more information.
More to follow…
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