Our thoughts on today's inflation figures
“The slight rise in the inflation figures to 4% has caught many economists off guard, with the expectation being we would see further falls in December’s prices.
“Despite being driven by extraordinary rises in tobacco, food prices are sticky – remaining consistently high. This, coupled with January’s energy price rises, will put more strain on household finances. The number of people we had to refer to food banks in December was up, as was the amount of households unable to pay their essential bills like gas and electricity.
“Today’s rise will also be a blow for the 2.4 million homeowners whose fixed rate mortgages are due expire in 2024 who we’re hoping for the start of interest rate cuts.
“We’re particularly concerned that continued tension in the Red Sea could trigger further price rises and believe households should brace themselves for higher food and energy costs. Of course, higher prices will push up inflation further and mean that interest rates will remain higher for far longer than anticipated.
“Millions of households - just about making ends meet - won’t be able to absorb further rises. And it paints a picture of a worrying year ahead.
“My advice is, if debts are mounting and you’re finding the essentials unaffordable, seek free support sooner rather than later. There are millions of households feeling the same pressures and there are solutions – you don’t need to go it alone.”
Caroline has worked in financial communications for more than 10 years, writing content on subjects such as pensions, mortgages, loans and credit cards, as well as stockbroking and investment advice.
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