Savers hit by further inflation rise

Savers have been hit by further increases to consumer prices index CPI and retail prices index inflation RPI, it has been reported.

According to latest figures from the Office for National Statistics, CPI inflation – the government's target measure – rose from three per cent to 3.4 per cent in March, while the RPI moved up 0.7 per cent to 4.4 per cent.

The high price of petrol has been blamed for this sharp increase, which looks set to further devalue consumer savings.

Howard Archer, chief UK and European economist at IHS Global Insight, said he was not surprised by the latest rise.

"CPI inflation averaged 3.3 per cent in the first quarter, which is exactly in line with the projection in the Bank of England's February Quarterly Inflation Report," he noted.

Mr Archer said that while the Bank "will not exactly be jumping with joy with the March CPI inflation data", it is unlikely to fundamentally change its economic policy.

As a result, consumers are likely to face low savings interest rates for the foreseeable future, he suggested.

The Bank of England has frozen its base rate at a historic low of 0.5 per cent since March 2009.

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2010-04-22 13:31:46 © Moneyextra.com