Chelsea Building Society: Annual retail inflation could hit almost 7%

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Chelsea Building Society: Annual retail inflation could hit almost 7%

Tue 19th Aug 2008

Rising food and fuel costs could increase annual inflation for goods and services to nearly seven per cent, Chelsea Building Society claims.

According to the society, household energy, food, petrol and rent comprise 33 per cent of all individual expenditure and recent increases could double the annual retail inflation felt by the average Briton.

Pensioners would be the worst hit, as food and energy acconts for over 35 per cent of their expenses, the society said.

Darren Stevens, director of customer services at Chelsea Building Society, said such an increase would cause "real strain".

He recommended saving and cutting back on unnecessary expenditure.

Households have been warned that inflation may return to 1970s levels, the Press Association reports.

Monetary policy committee member Tim Besley wrote in the Sun that it would be "easy to give in and let inflation get out of control" but said that would be "damaging and dangerous to the economy".

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