Increase in inflation may lead to debt problems

Wed, 19 Oct 2011

Some 93 per cent of people are worried about the effect increased inflation will have on their finances .

This is according to figures from the Post Office and debt concerns may become a real possibility for some after it was announced inflation has swelled to 5.2 per cent, which is the highest it has been since 2008.

Rising utility bills were behind the hike in the consumer price index, which many economists had not been expecting.

Some 19 per cent admitted they did not how much money they would lose because of the figure.

Post Office director of savings and investments Richard Norman stated: "Savers have had a hard time of late and another inflation increase will be bad news for many."

He added individuals should make sure they check out the rates of interest they are receiving.

Mr Norman's comments come after Lloyds TSB's Spending Power Report for September revealed there has been almost zero annual growth in discretionary spending power.

It also found London residents and having their finances squeezed more than any other people in the UK.
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