Why those with risk jobs may have predicted inflation rise

The recent rise in inflation is something that has been expected "for some while", according to one sector commentator.

Indeed, those with risk jobs in London may have been able to read the signs during the lead-up to the announcement from the Office for National Statistics that inflation rose from 3.3 per cent in November to 3.7 per cent in December.

Jasmine Birtles, founder of Moneymagpie.com, said the rise is a combination of factors, including the VAT increase and higher food and fuel prices, but that consumers should be grateful that it has not reached four per cent.

The government's target for Consumer Price Index inflation is two per cent.

"If it did [reach four per cent] then that really would be a problem. There really would be a strong possibility of interest rates having to be put up. But at the moment 3.7 is kind of around what was expected," Ms Birtles explained.

However, she added that the figure was still "massively" over the government's target threshold.

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