INFLATION will rise even higher than the 5.4% figure revealed this morning, and households face a cost-of-living crunch, warns the CBI.
The figure is the highest since 1992, and is driven by higher costs for clothes, food and footwear.
It is also a sharp rise on last month’s figure of 4.6%.
that contributory factors were in the housing and household services sector, fuel and second hand car industries.
The CBI says inflation was expected to rise again, especially if the price cap on gas and electricity prices is raised as a response to rising costs in the industry.
Alpesh Paleja, CBI Lead Economist, said: “With prices on the rise and real wages already falling, it’s likely households will face a cost-of-living crunch for much of this year.
“With price pressures further up the supply chain still strong, the cost of doing business will also continue to climb sharply.”
The CBI wants action from the Chancellor.
“It’s now vital that the Government comes forward with urgent solutions to protect the most vulnerable consumers, who will struggle most with anticipated price rises,” Mr Paleja said.
“Solutions must also be found for firms that are struggling with ever-growing cost burdens, especially energy-intensive businesses.
“This should be a precursor to longer-term energy market reforms, to build resilience against future energy price shocks.”
