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Tuesday, 22 March 2011

Now that's real inflation

Today we learn that inflation on the RPI measure hit 5.5% in February and the CPI rate hit 4.4%. These are worrying numbers, but not really a shock to the average UK person who has to buy food, fuel and petrol every week.

I personally think with an escalating cost of living (through inflation) and take home pay falling across many tax bands from next month, there could well be a further quarter of negative growth ahead as austerity bites.  The pubs' restaurants, hotels and service sector will see falling sales and margins as they try to hang on. Shop sales will be flat or falling in volume terms.

The solution to rising inflation? Surely the Base Rate must rise?

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