Inflation ‘set to exceed targets again’

15 September 2008

Bank of England Governor Mervyn King has told MPs that inflation is set to rise above target once again.

Inflation is currently well above the 2% target, reaching 4.4% in August. According to the BBC, some forecasts are predicting that the inflation rate will surge to 5% when figures are released next week.

The news follows the Bank of England’s decision to hold the base rate at 5% for the fifth consecutive month – a decision some analysts suggested would push the UK further towards a recession.

A spokesperson for Think Money commented: "These figures reflect that prices are rising at a growing rate, and even exceeding Government predictions. The average member of the public will need to tighten their belt for a little longer.

"The risk is that as prices get higher, more and more people will find themselves struggling, and many may find themselves getting into debt trying to get by. We advise anyone who finds themselves in that situation to seek debt advice as soon as possible."

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