Why inflation may be higher than expected, and how you are best placed to judge

January 24th, 2011|

A rise in inflation for January is hardly going to shock anyone after the recent rise in VAT, but I wouldn’t be surprised if it took a bigger jump than most are expecting.

Many retailers and shop owners are using the 2.5% VAT increase as an excuse to raise prices further. Let me take you through an example of my experiences from one day last week.

I started out by visiting my barber early in the morning he was telling me how his rent had increased from £14,000 last year to £18,000 per annum.  Now that’s an increase of 22%. At this point I was feeling sorry for him until I paid for my haircut and found that he’d had raised his prices from £9.50 to £12.50. That’s a 24% rise!