Inflation affects everything from mortgages, pensions and benefits to the price of train tickets.
So, what is inflation and what impact does it have?
What is inflation?
Inflation is the rate at which the prices for goods and services increase.
It’s one of the key measures of financial wellbeing because it affects what consumers can buy for their money. If there is inflation, money doesn’t go as far.
It’s expressed as a percentage increase or decrease in prices over time. For example, if the inflation rate for the cost of a litre of petrol is 2% a year, motorists need to spend 2% more at the pump than 12 months earlier.
And if wages don’t keep up with inflation, purchasing power and the standard of living falls.