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Should you be worried about inflation?

The vast majority of people in the UK will never have given inflation a second thought as they attempt to make ends meet and pull themselves out of the economic downturn. However, the truth is that inflation is a danger to us all which can and has impacted upon every corner of life in the UK!

Inflation is the devil which eats away at the value of your money and reduces your spending power on an ongoing basis. A basic example of how inflation can affect everyday life can be seen by the current situation regarding wage increases in the UK. Inflation in December spiked, hitting 2.9%, which effectively means that the cost of living, cost of services and cost of goods in the UK on average rose by 2.9%. When you consider that the vast majority of people in the UK will have seen no wage rise over the last two years, or very little if they are lucky, this means that every £100 you spent in November on your monthly budget will have cost £102.90 in December to maintain the same lifestyle.

However, the fact that very few people in the UK have experienced wage rises over the last two years means that the many people in the country will now be £2.90 a month worse off. This may not sound an awful lot, but when you consider the growing number of people who are struggling to survive at the moment, how can they possibly survive a further rise in inflation which means they will have to stretch their current finances further and further?

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