Inflation Increases To 11-Year Record High

According to official figures, inflation mounted to an 11-year record high in June due to rise in the prices of food and fuel.

The rise in the Consumer Prices Index measure of inflation, to 3.8 per cent looks likely to let down the probability of the Bank of England slashing interest rates in the near future, as it is well over the Government's target of 2 per cent. It could be a bad news for those trying to get out of debt and are planning to take out debt loans from high street banks.

The Bank has earlier suggested that inflation may go above 4 per cent before the end of the year, and this is the third month in a row that figures have exceeded the Government target figure.

The ONS figures revealed that the costs of food and fuel were initially responsible for the inflationary growth, in order to cope with the cost, a key factor in the increasing cost of grocery bills.

The ever-rising cost of necessary goods has caused worry among experts, with pensioners and young families likely to be among the hardest hit. In order to cope with the rising cost of living and to meet their needs people opt for different loans, which put them under severe debt crisis situation. However, be taking out personal loans could prove to be effective. These loans provide fruitful opportunity to the borrowers to get rid of debt troubles and live in a debt free environment.

Outgoing Bank of England deputy governor John Gieve stated that "The Monetary Policy Committee will continue to assess the balance between the risks of higher inflation from the commodity cost shock and the downside risks to output from the credit crisis".

"There are signs that the control over credit circumstances is beginning to have an effect on both consumption and investment. Most importantly, the sharp rises in commodity prices are squeezing real take-home pay which is bound to impact on consumption at some point."

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