The UK inflation rate rose to 3.5% in January - the fastest annual pace for 14 months - from 2.9% the month before.
The official explanation is that consumer Prices Index (CPI) inflation was driven up by VAT returning to 17.5% (from 15%) and higher petrol prices. Retail Prices Index (RPI) inflation which includes housing costs rose up to 3.7% in January, up from 2.4%.
This is all a smokescreen of course. CPI numbers count the general prices based on a goods-basket of selected commodities, it’s not the same as inflation. Prices go up because of inflation and real inflation has been ticking away for quite some time now.
When I moved to Scotland a little more than a year ago I could buy a six-pack of beer for £4.5, now you’ll be lucky if you get away with £7. A suite I looked at back then cost £80, now the very same one cost £125. The same can be seen throughout and please remember this is only the start. The newly printed money is only now started to pour into the real economy.
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