“According to the latest ONS figures the Consumer Prices Index (CPI) 12-month rate was 2.9% in August 2017, up from 2.6% in July 2017.
“Inflation is now at its highest level in five years. Rising prices for clothes and motor fuels were the main contributors to the rise. The figures sent sterling shooting higher, presumably on the basis that the Bank of England may now be willing to contemplate an interest rate rise.
“Next month’s figures will be used to determine the annual increases in pension and benefit levels. In terms of the triple lock on the state pension it seems likely that price inflation, as measured by the CPI, will exceed both wage inflation (currently running at 2.1%) and the 2.5% underpin.
“It is also interesting to note that the Retail Prices Index (RPI) 12-month rate in August 2017 was 3.9% - good news for members of occupational schemes with RPI ‘hard-wired’ into their scheme rules and those retired people with annuities providing RPI-based increases”
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