THE startling rise in food prices – announced by the Office of National Statistics as the major contributor to the rise in inflation between November and December – is putting additional pressure on consumer household budgets, adding to already rocketing energy cost rises.
Responding to the news that CPI inflation rose from 5.1% to 5.4% in December, Kitty Ussher (pictured), chief economist at the Institute of Directors, said:
“We already knew that the rise in the price of energy, fuel and second-hand cars was likely to keep inflation way above the Bank of England’s 2% target in December. What is of particular concern is that the change from November has come mainly from an increase in the price of food. Not only does this provide additional evidence that inflation is becoming endemic rather than transitory, it also bodes ill for households facing multiple rises in the cost of living this spring.
“We therefore expect interest rates to rise again when the Bank of England Monetary Policy Committee next meets in early February.”
The rising level of costs could impact leasing brokers in the personal sector as reduced budgets could influence car choices.
Ralph Morton is the leading journalist in the leasing broker sector and editor of Broker News, the website which provides information and news for BVRLA-registered leasing brokers. He also writes extensively on the fleet and leasing market in both the UK and Europe.
