Debt management becomes more pertinent as inflation rises
Debt management becomes more pertinent as inflation rises
- Monday, 1 February 2010Debt management may become even more pertinent for families this year, following one expert's warning that consumers should be prepared for rising inflation.
Latest statistics from the Office for National Statistics (ONS) indicates that the Consumer Price Index (CPI) measure of inflation increased to 2.9 per cent in December, up from 1.9 per cent the previous month.
It is the largest ever increase in the annual rate between two months.
David Kuo, director of financial website The Motley Fool, claims that rising inflation is something people "need to be very aware of".
"What it really comes down to is that people need to look after the inflation aspect themselves," he said.
"They need to make sure that if they have £110 extra each month they have got to do something with it. If you do nothing then that money will just shrink as a result of inflation."
There was little the government and Bank of England could do to rectify the situation, said Mr Kuo, due to outside influences and a poor economic growth.
According to recent research by Woolwich, the mortgage arm of Barclays, homeowners in England and Wales saw a 20 per cent drop in the proportion of their take-home pay spent on monthly mortgage repayments last year.

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