Have you noticed annoying price increases in all sorts of daily goods and services? The supermarket shop just creeping up… the price of a pint down the pub getting increasingly ridiculous?
You’re not alone. Interestingly, the Bank of England thinks you are over-reacting.
It is the Bank’s job to keep inflation under control, its target is 2%. For most of the pandemic it was running much lower than that and in the early days the fear was that we might see deflation – prices falling.
That’s generally bad, since the economy grinds to a halt. Why buy something this month if you know it will be cheaper next?
Last month inflation hit 2.1%, the first time it has gone above target for ages. If the Bank were worried about inflation, it would put up interest rates – borrowing costs – in order to slow spending.
The Bank this week kept interest rates at record lows of 0.1%, and said that inflation is only a small and “temporary” issue.
It reckons inflation will peak at 3% later this year, then fall back after that.
Not everyone in the City agrees.
At Find Out Now we asked people: What goods and services, if any, have you noticed are more expensive as the Covid-19 restrictions have been lifted this year?
Fuel and groceries are the top two areas where people have noticed that prices are going up – and those are two things people just have to buy. It is quite hard to cut back on either.
The fear is that once the inflation train gets going, it is quite hard to stop.
You can read our press release on the issue here.