The office of National Statistics today released its most recent inflation data. We answer five questions on the current state of inflation.
What is the current rate of consumer price inflation?
For November inflation remains unchanged from the previous month at 2.7 per cent.
How does this compare to wages?
Over the past year inflation has risen faster than wages with the average monthly income £22 lower than last year, according to a Bank of England survey by NMG Consulting.
What’s risen and what’s fallen in price?
Petrol prices have fallen by 3 per cent a litre on the month to £1.35 while diesel prices dropped 1.5p to £1.42 a litre.
Retail prices index (RPI) inflation, which includes housing costs, fell to 3 per cent last month, from 3.2 per cent in October.
The main rises came from food and non-alcoholic beverages prices which rose by 1.1 per cent between October and November. This covers fruit and, to a lesser extent, bread and cereals were the main contributors.
Housing and household services, such as gas and electric, rose overall by 0.6 per cent between October and November,
What’s the outlook for the future?
According to economists inflation could rise again next year to over 3 per cent as the full effect of the fuel price hikes and rising cost of fuel are factored into the figures.
UK economist at IHS Global Insight, Howard Archer, told The Telegraph: “It still looks very possible that increased energy tariffs and higher food prices could push consumer price inflation up to 3pc early in 2013 and keep it there for a while. Further utility price hikes will kick in during December and January.”
What is the government doing about inflation prices?
A Treasury spokesman told The Telegraph:
“At the Autumn Statement, the Government took more action to help households with the cost of living including a further increase in the tax-free personal allowance and cancelling the fuel duty increase that was planned for January.”