This story was posted on : 06/01/2008

Inflation is crawling up again and this is bad news for the economy.

The latest RPI figures show that it has increased to 4.3% which is down to higher pay deals. The RPI is not the governments favoured indicator (no surprise) but it is the one that affects the man/women in the street more than anything. 

With the government preferred CPI figure running at just over 2%, there surely must be questions raised as to why the gap between the two is increasing.

With the cost of energy (oil, gas, electricity) all going back up again and retailers reporting poor christmas trading, the economy isn't looking too rosy now.

What this means to those in debt

Higher inflation may mean interest rates come down earlier and by more, but this is unlikely to really filter through to credit cards and such to offset the fact that everything is essentially more expensive.

With the credit crunch also likely to bite hard in 2008, it means that the supply of money for lending will be subject to tighter decision making. This leaves those with debt problems looking to refinance their way out of it with big problems.

Hold on tight - 2008 looks like it might be a rough ride

 

 BBC News item