Inflation falls but concerns remain

Commenting on this morning’s inflation figures, Sarah Pennells, Consumer Finance Specialist at Royal London said:

"The good news is that the main consumer inflation index has fallen again, following 12 increases in the Bank of England base rate which have pushed up mortgage and borrowing costs for millions on top of higher energy, food and other household bills.

"Inflation, as measured by the Consumer Prices Index, has been around the 10% level for a year now, with food price inflation often sharply higher. People have been making cutbacks across their everyday spending in an attempt to make their money stretch, but with prices still rising by more than wages, it’s becoming increasingly difficult.

"Our research shows that one in three people are overdrawn or have to borrow before the end of the month. Some people – around one in five – plan on using savings to help pay for the cost of living, but that’s not an option for everyone as millions of people have less than £100 in savings. There’s a real worry that, even if inflation reduces further, more people will be pushed into financial crisis."