Inflation rises sharply in November

16/12/2009

There was more bad news for people suffering with debt problems'>debt problems yesterday, as figures showed that inflation rose last month at its highest rate since May.

The Consumer Price Index increased to 1.9 per cent in November, largely thanks to a sharp jump in petrol prices.

In the wake of the increase, economists were warning that the index could leap to as high as three per cent early in 2010.

The news was particularly grim for those relying on savings. Research from Moneyfacts shows that, after basic tax and inflation, the average no notice savings account offers a real return of minus 1.25 per cent – meaning that savers are, in many cases, losing money.

Kevin Still, director of debt management firm EuroDebt, said that "many homeowners are reliant on interest rates remaining low just to balance the books, especially after Christmas".

EuroDebt traditionally sees a rise in debt advice enquiries in late January when the credit card bills come in.

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