Understanding Inflation is vital because of its effect on the cost of living and the potential impact on managing finances, such as saving accounts. The current Inflation rate as of February 2022 is 5.4%. A rise in inflation can be positive if the increase is not extreme. However, according to the BBC, there has been a staggering climb from 0.5% to 0.25%. The Bank of England had already suggested that there would be an increase in prices.
Furthermore, salaries are projected to rise slower than the cost of living, which would cause a substantial squeeze in the financial pockets of the public in decades. This comes shortly after the Chancellor revealed a support bundle to assist those most in need after an astonishing 54% soar in energy bills. The primary cause driving up costs across the economy is a rise in gas and electricity costs.