Thanks to the increase in bills across the board in April, where pretty much every bill increased, such as energy, water, flights, restaurants and food and drink, inflation is now 3.5% in the 12 months up to April.
Inflation is the price of essentials and everyday things increasing over time (such as food).
Previously inflation was 2.6% in the 12 months up to March, so a huge jump.
Water bills rose a whopping 26.1%, gas 12.2% and electricity 4.6%, compared to this time last year.
The Bank of England has a target of keeping inflation at 2%, so a fair bit off now, although they did forecast an increase in inflation due to the expected bill increases.
They use the Bank of England base rate as a tool to combat inflation, and it’s the rate they give the banks in exchange for interest, and can affect how much the banks then give to you. So, it affects things such as mortgages and savings.
The base rate was recently dropped to 4.25% from 4.50% to encourage a bit more spending in the economy, however this increase in inflation might make the Bank of England more cautious over future reductions.
As a reminder, if you have a mortgage that’s coming up for renewal soon (the fixed interest rate on your mortgage is ending, if you have one), make sure you are getting the best rate out there. Use our mortgage comparison tool to check and apply easily.
If you have savings, make sure you are getting the best savings rate, the difference between savings providers is huge these days, and you could be missing out on a small fortune. Here’s our best savings accounts to check.
