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Inflation Peak Will be Higher Than Expected
08/08/2011
Inflation will rise higher and peak sooner than expected according to the Bank of England's rate-setting monetary policy committee (MPC). But there remains little sign that the Bank will increase interest rates any time soon.
The warning will infuriate hard-pressed households as rising prices further erode their budgets and standard of living with savers being hit particularly badly, suffering low returns as a result of rock bottom interest rates and from price rises eating away at the buying power of their nest-egg.
The monetary policy committee said: 'Despite the fall in CPI inflation in June, it was likely that inflation would rise further, to over 5 per cent, in the coming months. In the light of recent developments in utility and food prices, the peak in inflation was likely to be a little higher and come sooner than the committee had previously expected.'
Previously, the Bank's Governor, Sir Mervyn King, has said inflation would only touch 5 per cent, and later in the year. Now it expects it to pass that mark sooner, primarily because energy companies have embarked on a fresh wave of energy price hikes.
Homeowners aged over 55 years who are worried about rising prices and would like to know how much money the value of their property could release to increase their income, can find out by contacting therightequityrelease.co.uk for equity release advice.
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