UK inflation (CPI) hit 5.5 percent in January – the highest since 1992 when it stood at 7.1 percent and was on the verge of crashing down to just 2.2 percent a few months later. The latest figures from the Office for National Statistics also put the inflation measure including owner occupiers’ housing costs (CPIH) at a similarly high level of 4.9 percent.
In reaction to the latest figures and the soaring cost of living, Colin Dyer, client director at Abrdn Financial Planning, said households should prepare for further acceleration of the crisis: “The Bank of England could also be justified in raising interest rates more than once over the next few months to defend these soaring prices – meaning even more challenges may lie ahead for households…The most important thing savers can do now is review how this environment will affect their finances, where they are keeping their savings, and make adjustments as necessary.”
Joanna Elson CBE, chief executive of the Money Advice Trust warned: “For the many people whose budgets are already at breaking point, this is an incredibly worrying time, made harder knowing that energy prices are set to skyrocket in the coming months”.
This chart shows the CPI 12-month inflation rate in the UK from 1989 to 2022.
