Inflation could reach 7%, building society warns

19/08/2008

Annual price rises of seven per cent could be marked over months to come, analysis from the Chelsea building society has suggested.

The inflation figure - beating most analysts' 2008 predictions of five per cent - was derived after the firm factored in energy price hikes, rises in rental costs and previous data on consumer goods.

By way of comparison, the government's latest consumer price index stood at 4.4 per cent, itself a 16-year high.

Darren Stevens, director of customer services at the Chelsea, commented: "The [price rises] will create a real strain for the average man and woman on the street. Recent fuel hikes, food increases and rental demands are forcing people to find further ways to afford life's essentials.

"In tough times, it becomes even more important for people to manage their money effectively and adapt their savings habits."

He added: "Reigning in unnecessary spending, considering each purchase carefully and adapting the amount you save each month can help save money to cover rising costs and still keep money aside for long-term plans."

Tags; Current UK Economy, Budgeting Advice,

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