What does the UK’s soaring inflation rate mean for you?
The headline rate of inflation in the UK has risen to 5.1% – its highest rate in a decade. The speed of increase has taken forecasters by surprise – last month the Bank of England said it expected inflation to peak at 5%, but not until April next year.
It is the measure of how much prices are rising and falling and is tracked by several different indices. The main measure used by economists is the consumer prices index (CPI), which records the cost of a basket of 700 items including food, transport and entertainment. The headline rate refers to how much those prices have gone up over a year. The Bank is tasked with keeping annual inflation at 2% but it has been above that for six of the last seven months and is now much higher.
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