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Inflation puts pressure on families
Wednesday June 19th 2013
Households saw their tight budgets squeezed even further in May as price rises for air travel, clothes and shoes all helped push inflation up higher than experts predicted.
The Office for National Statistics (ONS) revealed the Consumer Prices Index (CPI) inflation was 2.7% last month, up from the 2.4% recorded in April and slightly higher than the expected 2.6%.
Inflation is expected to reach a peak of 3% during the summer before gradually reducing in the rest of the year. It is certainly much higher than the Bank of England would like. Inflation has not hit its 2% target since the end of 2009, meaning prices are going up faster than wages, giving consumers less income to spend or save.
The ONS revealed that typical earnings rose just 1.3% in the 12-month period ending in April, up 0.7% on the March figure.
Air fares have risen by nearly a quarter (22%) since April, the biggest rate of growth since records were first kept in 2001. All types of flights, European, long haul and domestic, were affected and the ONS believes the early Easter break did not have much of a bearing on the price hikes.
And It was not just travel abroad that cost people more, so too did transport at home. Prices were 0.4% higher last month than they were in April as petrol and diesel price cuts slowed from 3.1% this time last year to 2.2%.
Households also found themselves spending more on clothes and footwear, with a big rise in the cost of women's outdoor clothes due to the colder weather.
Copyright Press Association 2013
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