Inflation hits 3%
Consumer Price Index (CPI) annual inflation – the Government’s target measure – was up from 2.5% in March to 3.0% in April.
The biggest influencing factors to the change in inflation came from price hikes made to items related to housing and household services. There were further large upward contributions from food and non-alcoholic beverages in particular meat, fruit, some breads and cereals and fish.
According to Alliance Trust, food price inflation has increased by more than 7% over the last year, utility prices have increased by over 8% and petrol prices have risen by 19% in the same period. Simon Ward, chief economist at New Star, said: “Today’s inflation figures are shocking but should not have come as a complete surprise given recent warning signals.”
Inflation rates, however, tend to differ according to different age groups. Alliance Trust found that the inflation rate facing the over 75 year-olds is actually 4.1%. This is due to a larger proportion of older people’s income going towards the cost of food and utilities.
Shona Dobbie, head of the Alliance Trust Research Centre, said: “We still face the problem that it is the prices of basic goods and services which are displaying the highest inflationary pressure. When everyday items are going up in price, the impact on our wallets is highly visible to us all. The official headline rate of inflation rose considerably this month, but in the case of food and energy the situation is even worse, and this leaves us with less money to spend on the items where prices continue to fall. “