The Office for National Statistics has just announced that UK inflation jumped from 1.9% in January to 2.3% in Feb, meaning in real terms, your money is now worth less. The new rate is the highest it's been since 2013.
Inflation, for the uninitiated, is the economic term for prices going up. It includes products and services, and when it rises, one unit of currency (eg. a pound) buys less of said products and services than it did before. Like how a 20p coin used to buy you two Freddos and now it doesn't even buy one.
We were expecting a rise of around 2.1%. The Bank of England aims to keep inflation at around 2%, but is expecting it to go as high as 2.8% within the next year or so, the BBC reports. This is a result of transport and food prices creeping up, and – you guessed it – Brexit, which caused a drop in the pound against other currencies, making our imports cost more.
Wages have been rising by 2.2%, which means inflation is now higher than wage growth, and as a result our money is worth less in real terms.
TUC general secretary Frances O’Grady comments:
"Working people across the UK are now facing the double blow of rising prices and slower wage growth.
If the government doesn’t wake up, we risk sleepwalking into another living standards crisis."
Happy Tuesday, everyone. [The Guardian]
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