Apr 18 2007
As the headline rate of inflation exceeds three per cent, obligating Bank of England governor Mervyn King to write an explanatory letter to chancellor Gordon Brown, new data has shown older Britons to bear the brunt of inflationary rises.
Recently published research from Alliance Trust shows that while headline inflation has hit a ten-year high of 3.1 per cent, the rate calculated for purchases by the over-75s has risen from 4.5 per cent to 4.7 per cent in March.
This rise has been attributed to increases in basic food prices amid a constant backdrop of high gas and electricity bills.
Shona Dobbie, head of the Alliance Trust Research Centre, said: "The impact of higher prices for basic goods and services such as heating and food always falls most heavily on the elderly."
Ms Dobbie added that elderly people and low earners are typically affected by price rises in these products as they spend a larger proportion of their income on these items.
Barry Naisbitt, chief economist at Abbey, described the recently published figures for headline inflation as "an unpleasant surprise".
