{"id":23492,"date":"2022-11-15T16:46:39","date_gmt":"2022-11-15T16:46:39","guid":{"rendered":"https:\/\/smh.group\/?p=23492"},"modified":"2022-11-15T16:46:39","modified_gmt":"2022-11-15T16:46:39","slug":"dissecting-inflation-what-a-difference-a-year-makes","status":"publish","type":"post","link":"https:\/\/devstagesite.co.uk\/smhgroup\/dissecting-inflation-what-a-difference-a-year-makes\/","title":{"rendered":"A year of inflation: what a difference it makes"},"content":{"rendered":"

Annual CPI inflation hit 10.1% in September, but that does not mean every price is showing a double-digit increase.<\/strong><\/p>\n

The September Consumer Prices Index (CPI) inflation reading is probably the most important inflation metric in a given year. Traditionally, this number is the one used by the Government as the basis for increasing tax allowances and bands, as well as benefits \u2013 including the state pension.<\/p>\n

In recent years the significance of September\u2019s CPI reading has waned, as the Government has chosen to freeze or restrict increases to limit the cost to the Exchequer of these benefits. The most obvious recent example is the freeze to the personal allowance (\u00a312,570) and higher rate threshold (\u00a350,270 outside Scotland), which would be \u00a314,270 and \u00a357,170 from April 2023 had the first two years of a four-year freeze not happened.<\/p>\n

This year, the September 2022 annual inflation rate of 10.1% is more significant and not all it seems. The graph above shows the annual inflation rate in the 12 categories that make up the CPI \u2018shopping basket\u2019 of goods and services.<\/p>\n

Only a third of those categories registered inflation above 10%. And another third recorded rises of no more than 5%. All the categories experienced higher inflation in September 2022 than September 2021, when the annual inflation rate was a more modest 3.0%, but the changes brought about over the intervening twelve months have had significantly varied effects across the different categories:<\/p>\n