The consumer prices index measure of inflation for August was the highest since March 2012 – though the Office for National Statistics (ONS) said much of the effect was likely to be temporary. The increase of 1.2 percentage points between the July CPI rate and the August CPI reading was the biggest on records going back to 1997, the ONS has confirmed.
The 3.2 percent rate is higher than the predicted average of 2.9 percent, according to polling by Reuters.
The Bank of England expects inflation to peak at 4 percent this year, though it is thought the effect will be transitory.
More expensive travel and food costs are largely to blame for the push.
Food prices, in comparison with August last year when the Chancellor’s Eat Out to Help Out scheme was running, have jumped considerably, although artificially.
Transport costs have also risen, with petrol being the highest price since September 2013 at 134.6p per litre.
Second-hand car prices have been driven to high levels, up 18.4 percent over the past four months due to a global shortage of semiconductor chips hampering the production of new cars.
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“While some inflation is a healthy sign for the economy, once it exceeds pay rises and the interest rates on savings, your standard of living will reduce.”
Tom Martin, Money Expert at Chip, also advises making changes to your working situation to get the best out of high inflation rates.
He told Express.co.uk: “It’s not all doom and gloom, if you’re in work, ask for a pay rise, or look for a better paying job, as the job market is on your side right now.
“Also, in many cities rents are still down versus the pre-pandemic market, but are quickly rising again as Britain gets back to the office.
“So it might still be worth looking to move, but house prices are still up, a consequence of pent-up demand from a year of lockdowns and the stamp-duty holiday.
“Lastly, if you have savings, you need to be looking at ways to fight the effects of inflation, whether that’s through getting high interest rates, or by looking at investing your cash.”