Wednesday, March 21, 2007

UK Inflation Rates March 2007

Markets were disappointed as the Consumer Price Index CPI measure of inflation rose from 2.7% to 2.8%.

The CPI measure is the government's preferred measure. However many feel it doesn't reflect their personal changes in the cost of living. The CPI excludes several items such as: council tax, mortgage costs or house price changes.

The old RPI measure increased to 4.6% driven higher by rising interest payments and council taxe rises.

Inflation Rates for Pensioners

It is estimated that for pensioners the true cost of living may be rising as high as 9.1%. This is because they spend a higher % of their money on things like Gas and council taxes. Pensioners are increasingly indebted as their costs of living rise faster than their incomes. (1) Pension and other benefits are calculated according to CPI inflation.

Inflation rate reaches 4.6%

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