Inflation-driven costs may increase need for debt management
Inflation-driven costs may increase need for debt management
Wednesday 17th February 2010
The latest figures from the Alliance Trust Research Centre reveal that inflation rates have increased across all age groups during the month of January, with those in the 50 to 64-year-old category facing the highest rate of five per cent.
The official inflation report showed that the headline rate of inflation rose from 2.9 per cent to 3.5 per cent in the past month.
Each age group was found to be facing inflation rates that are considerably higher than the official figure.
Those in the 30 to 49-year-old age group face the second highest rate of inflation at 4.8 per cent, according to the report.
The recent increase in VAT, rising prices for alcoholic beverages and tobacco, high fuel costs and the recent depreciation of sterling is being attributed to the dramatic increases.
Commenting on the figures, head of the Alliance Trust Research Centre Shona Dobbie said: "The fact that both working age groups now face an inflation rate in excess of 4.8 per cent, but average earnings have grown by only 1.6 per cent over the last year, highlights the sharp erosion of purchasing power which we have been pointing out over the last few months."
Higher transport costs were said to be impacting people the most, having risen by 11 per cent over the last year, and fuel price inflation now running at more than 25 per cent.
Meanwhile families are expected to face further financial difficulty, with the National Institute of Economic and Social Research warning of rising unemployment, reduced disposable income, and rising taxes and inflation over the next two years.
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