Rising inflation heaps stress on consumers
Today's announcement by the Bank of England that inflation hit 5.2% in September, the highest level for three years, adds further pressure to the many households across the UK.
Research from MoneySupermarket.com has revealed that 71% of British consumers will need to turn to their savings, credit cards or overdraft to fund rising bills.
As we come into the colder months, most consumers will be feeling the impact of recent energy price rises which added an average 17.4% to the cost of gas and 10.8% to the cost of electricity, resulting in average annual standard bills of £1,287.
Additional research found that UK adults are so stretched financially due to the rising cost of living that a quarter (26%), almost 13 million people, say they now instantly get stressed or worried whenever they receive a bill. Of those that feel stressed and worried about opening their bills, over half (54%) said the biggest cause was the simple fact that bills just keep rising, meaning they struggle to know how much they will be and how to deal with them. Nearly a third of those worried (31%) panic because they have more money going out of their current account than they have coming in every month.
Commenting, David Miller, partner at Cheviot Asset Management, said: "This is not a re-run of the 1970s – Britain is not going back to the days of endemic high inflation. While these numbers are slightly worse than expected they are not shocking.
"If you strip out higher taxes, energy bills and food prices, Britain's inflation would be about the same as Germany's. As these factors work their way out of the equation over the next year we can expect to see inflation coming down."
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