Wednesday, March 25, 2009
CPI really 4.6%?
The collapse in the value of the pound and a surprising rise in food prices has left inflation stubbornly high. CPI has risen from 3% to 3.2%. Indeed, had the Chancellor Alistair Darling not cut the rate of VAT from 17.5% to 15%, CPI would be standing at an uncomfortably high 4.6%, more than double the target of 2 per cent. The richest fifth of the population are enjoying the lowest rates of inflation, about minus 1 per cent; the items that have risen the most, such as food, represent only a fairly small proportion of their spending.Meanwhile the poorest fifth have seen their cost of living rise by nearly 6 per cent.