What does a 40-year high of 9% inflation mean for your finances?

According to recent figures from the Office for National Statistics, inflation has risen to 9%, putting pressure on household budgets.

It means that the consumer price index (CPI) has risen to a 40-year high after rising from 7% in March.

Experts projected that the figure would rise to this level, implying that British consumers have less purchasing power than previously.

However, the Bank of England has already predicted that inflation will continue to rise, reaching 10% within months.

Inflation is defined as the change in the price of goods and services over time.

When it rises, so do the prices of everyday things, necessities, and expenses, which means you’ll have to stretch your monthly paycheck further.

Consumers are already dealing with skyrocketing energy costs and recently increased tax payments.

And, because this is the first time the data has taken into account the April price ceiling hike, the biggest contribution to the increase in inflation was rising energy bills.

When the price cap was raised on April 1, the average household energy bill jumped by 54%.

However, another energy price cap increase in October, when the average household bill is expected to rise by another 32%, might exacerbate the inflation number.

Chancellor Rishi Sunak stated that “we cannot entirely protect people” from global challenges, which contributed to inflation reaching 9%.

Petrol prices are also adding to inflation, which has reached new highs for the year.

Because of the current Russia/Ukraine situation, motorists have faced record gas prices and a scarcity of supplies.

According to the Office for National Statistics, the cost of food and non-alcoholic beverages increased by 6.7 percent last year, while the cost of furniture and domestic equipment increased by 10.7%.