Why you should care about inflation


When people start talking about things like the consumer price index, inflation and interest rates, you'd be forgiven if your eyes started to glaze over. It's not your fault: to most of us average Joes, economics isn't exactly chock-full of sex appeal (soz Adam Smith).

But today it was announced that CPI inflation jumped to a near two-year high of 1% in September from 0.6% in August, a bigger rise than was expected. This is news that you should actually pay attention to, because it's something that affects all of us.



The main upward pressure on CPI came from a jump in clothing and footwear prices - especially women's clothes. Bad news to all the ladies looking to update their winter wardrobe.

Clothes prices rose 5.5% between August and September. To put this in somewhat simple terms, a coat that cost you £40 in August would cost you £42.20 now. It might seem small now, but what if this increase happens every month? That would really add up.


Obviously it's not like all the shop assistants have gone round their stores marking up prices by 5.5%, but it is an indicator of how prices are slowly creeping up, and this is definitely going to have an impact on our wallets.

However, maybe it's not time to panic just yet. The ONS said the "relatively large" increase in clothing prices was in line with seasonal trends, and not actually triggered by the drop in the value of the pound following the EU referendum result.

Hotels and restaurants

Chicken curry

Clothes prices weren't the only thing on the rise. Prices at restaurants and hotels jumped 0.7% between August and September, compared to a mere 0.2% a year ago.

To put this into perspective: your favourite curry and a beer combo at your local Indian might have cost you 12 quid in August, but in September could be closer to £13.



Petrol prices were also hit: a litre in August cost you 110p and in September climbed to 111.2p. For diesel-users, prices increased 1.5p to 113.3p.



Perhaps something you don't have to worry as much about is your weekly shop. Prices at supermarket check-outs have continued to fall as the Big Four are locked in a price war against each other.


So inflation is definitely something you should care about, because it has a direct impact on your day-to-day spending. It's worth keeping an eye on where it goes over the coming months: to see whether these are just normal seasonal changes, or will have longer-term effects due to the turbulent political climate.