Northern Ireland

Inflation bites as prices rise faster than incomes

Prices are rising much faster than incomes. That is why everyone feels poorer - because in most cases they are.

Inflation rose sharply last month. As measured by the Consumer Prices Index, it increased from 4.5% to 5.2%.

The Retail Prices Index - which includes housing costs - rose from 5.2% to 5.6%, its highest level in more than 20 years.

Since 2007, when the current economic woes began, inflation has risen a whopping 15.5%. But wages have only increased at about half that rate.

Specific key items have seen prices shoot up since then. Food is up by 28%. Household energy bills are up by a quarter.

Clothes are the only category where prices have fallen - down 8.7% in four years.

There is some comfort in the knowledge that this latest rise in inflation is unlikely to prompt a rise in interest rates.

The UK economy is currently so weak and the Bank of England expects inflation to fall next year.

Also, those on benefits and state pensions, will see next year's payments increased in line with this month's rate.

This is good news for them, but not for a government trying to control public spending.

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