The Office for National Statistics today announced that inflation levels have risen with the consumer price index (CPI) hitting 4.5%.
This is bad news for consumers as the cost of living is set to increase further. The Bank of Englandís target rate for CPI is 2% and expects inflation to return to target levels within the next 2 years.
Inflation has risen from 4.4% in July to 4.5%, with clothes, fuel, and household goods increasing at their fastest rate.
Clothing and footwear has risen by a staggering 3.7%, which is the largest rise on record for the July – August period. The cost of womenís clothes increased at the start of the autumn season.
The sale of alcohol and tobacco actually fell overall though, by 0.6% this year; this is mainly due to the price of spirits falling by 6.4%.
Games consoles, computer games and toys fell by 0.4% between July and August, which was the largest downward contributor to the CPI.
The price hike in gas and electricity by 5 of the leading 6 energy suppliers has had the largest effect on the inflation rate of housing and household services.
E.ONís energy tariff will change from today, as the cost of gas will increase by 18% and electricity by 11%. This increase means that the average dual fuel bill will increase by £170 or 15%.
Consumers are urged to switch their energy supplier to find the best deal. With more price hikes appearing to be inevitable, a fixed tariff could be advisable.
Compare gas and electricity with MoneyExpert
Southern and Scottish Electricís (SSE) latest price hike comes into effect tomorrow. SSE is increasing their gas price by 19% or £122, and 12% or £51 for electricity.
This adds an extra £171 to the average annual dual fuel bill.