UK Inflation Down Affects Benefits

UK Inflation Down Affects Benefits.

The headline rate for inflation, now CPI, the Consumer Prices Index has fallen to 2.2% in September from 2.5% in August.  The Office for National Statistics suggests this is good news for hard pressed families.  We suggest it is better news for government finances.

Our view
Here is the real impact, increases to state benefits next April are based upon inflation figures from the previous September.  So for all those who were expecting a higher pay rise next year, forget it.  Global food shortages will drive prices up, petrol prices are also on the up but your benefits pay rise has been set in September.

We suggest the economy will be manipulated so that any real inflation, that the Government needs to devalue its sovereign debt, will play through during the year, but the planned changes to how inflation is measured, will be changed to reflect items that traditionally fall in cost in Autumn.