Why inflation will bring more pain
We wrote last week of our concerns regarding inflation. So we weren’t particularly surprised to see Tuesday’s numbers. They showed the Consumer Price Index rising at 3.3% (1.3% above the official target of 2%) and the Retail Price Index (excluding mortgage interest bills) at 4.4% (not far off 2% above its old 2.5% target).
But that doesn’t mean we aren’t worried about them. Today’s inflation is very visible. It isn’t the prices of things we rarely buy – DVD players and new cars – that are rising at speed, but of the things we regularly buy and that we have to buy – energy, food and the like. Everyday brings a new nastiness of some kind. On Tuesday alone we read that Majestic is warning wine prices might have to rise by 10% to cover the costs of transport and the rising euro, and that even the price of bananas is set to jump by 8%.
Read the full editor’s letter here: Why inflation will bring more pain