Inflation rises to 5.2%

by Richard Kilner

Story link: Inflation rises to 5.2%

The official inflation measure soared by 0.5% from August to September, figures released today show.

The Consumer Price Index (CPI) rose from 4.7% to 5.2% continued to be driven upward, largely by the increasing cost of energy.

The Retail Price Index (RPI) also increased, but marginally from 4.9% to 5%. Although not the official inflation rate, RPI is often used for salary negotiations.

Despite rising sharply yet again, many now forecast that inflation may have hit, or be about to hit, its peak, prior to falling during the next year.

Inflation continues to stand far outside the government set target of 2%, with the Bank of England recently cutting 50 basis points from the interest rate as inflation moves behind the severe financial turbulence in the list of economic priorities.

With a recession likely in the near future, demand will decrease, and coupled with falling global commodity prices the inflationary pressures, (most notably food and energy) responsible for driving the rate up, will begin to weaken.