Inflation rose to 3.2 percent in August, the highest level in nearly a decade.
It was up more than 2% in July when it was lower due to summer sales and discounts.
According to the National Bureau of Statistics, inflation was 2.5% in June, according to the Consumer Price Index (CPI), and 2.1% in May.
The Bank of England warned that inflation could reach 4% by the end of the year as commodity shortages and strong economic recovery push up prices.
Neil Messenger, director of client and markets, said that after the decline in July, inflation has risen again in a month and has continued to march upwards to the peak of the year.
“While the Bank of England still expects rising rates to be temporary, savers need to do what they can to ensure that their cash flows keep up with inflation. , Or exceed it. “
Inflation is a measure of the value of life. It looks at how much the price of goods has changed over time.
The average increase in prices is usually based on how much things are worth today compared to a year ago and this is called inflation.
So if the inflation rate is 2%, it means that prices are usually 2% higher than last year.
The higher the rate of inflation, the higher the prices.
A higher inflation rate means you have to spend more, but how much you earn may not be growing at that rate and it may be less in your pocket overall.
It also means that if inflation is higher than the interest you are earning on your savings, you lose the power to spend.
The saver with sa 1000 is easily accessible in a cash account that pays an interest rate of 0.6%, for example, only 6 pounds.
But inflation means that today £ 1,000 a year will be less than 2 – or 20.
More to follow …
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