Highest inflation since 1997 "spells trouble" for UK economy

Figures released today have shown that inflation in the UK has seen the biggest jump since records began in 1997.

The Office for National Statistics (ONS) has announced that the cost of living has increased by 3.2 per cent in the year to the end of August.

The figures were up by 0.9 per cent on the year to the end of July, reflecting the biggest one-month increase that the ONS has ever recorded.

Contributing to the spike in living costs were higher prices for petrol, used cars and food, which were all up by 2 per cent from July’s figures.

However, the ONS expects that inflation will drop again next month, as August’s figures were affected by last year’s Eat Out To Help Out program, which discounted restaurant meals by 50 per cent.

Sarah Coles, personal finance analyst at Hargreaves Lansdown, commented: “Inflation has taken a breathtaking leap, surging at its fastest rate in over 20 years.

“It was given a significant shove by the Eat Out to Help Out scheme discounts a year earlier, which will drop out of the figures next month.

“However, much of this enormous jump is powered by the same alarming imbalance between supply and demand that has seen yawning gaps open up on the supermarket shelves. It spells trouble for shoppers, savers and the broader economy.”