Inflation, pensions, housing and fraud

Inflation has risen more than expected and the headline rate is now at its highest level since July 2014.

Figures from the Office for National Statistics (ONS) showed the Consumer Price Index (CPI) hit an annual rate of 1.6 per cent in December – up from 1.2 per cent the previous month. Economists had predicted an increase to 1.4 per cent.

Weaker sterling since the Brexit vote has affected the cost of many prices. The ONS said that higher food prices and air fares helped to increase the CPI.

Ben Brettell, senior economist at Hargreaves Lansdown, said: ‘December’s producer price data contains a strong indicator that higher inflation is coming. Input costs rose 15.8 per cent year-on-year – the highest figure recorded for more than five years. It’s unlikely that cost increases of this magnitude can be fully absorbed by firms, leaving them with little choice but to pass some on to consumers in the coming months.’ Shop Direct The Telegraph reports that the owner of Littlewoods.com and Very.co.uk enjoyed a record Christmas as the trend for consumers shopping on mobile phones rather than in stores continued. Shop Direct recorded a 9 per cent rise in group sales for the seven weeks to 23 December. The group’s Very.co.uk site grew sales by 19 per cent year-on-year. Bank of England The Guardian reports that the Bank of England ‘is keeping a close watch on consumer spending amid signs households are dipping into their savings and amassing debts to keep spending in the face of rising inflation’. In a speech setting out the trade-off the Bank faces between keeping inflation in check and supporting growth and jobs, Mark Carney noted signs that consumers continued to power the UK economy. Pensions

Mistakes made on vital financial forecasts over the past few decades mean that tens of thousands of workers are facing a poorer retirement.

According to ThisisMoney, this could result in ‘a shortfall of thousands of pounds over the course of someone’s retirement, through no fault of their own’.

The website added: ‘The new state pension was introduced last year promising workers a fairer and simpler system, whereby anyone who made 35 years’ worth of full National Insurance contributions would qualify for a full state pension. However it then emerged that millions of workers would receive less than this amount – even if they had paid in for the full 35 years – because of a system called contracting out.’

Housing

Soaring rental costs mean that buying a family home where just one person in the household earns a salary is out of many people’s reach in many towns and cities.

Mail Online says that data from crowdfunding platform Property Partner suggests that ‘when one parent stays at home, more than half of the household income goes on renting an average three bedroom home. This is the case in one in five towns and cities in Britain.’

In other housing news, December’s activity in the UK’s housing market was up 40 per cent on December 2014 according to the latest research from Connells Survey & Valuation.

First-time buyers led the field with the number of valuations rising by 26 per cent on an annual basis. Meanwhile, the number of valuations conducted for those selling property increased by 25 per cent between December 2015 and December 2016. Over the same period, valuation activity among those looking to remortgage increased by 19 per cent.

Meanwhile, the latest monthly data from the ONS shows that the average property price in Britain increased by 6.7 per cent in the year to November 2016, up slightly from the 6.4 per cent recorded in the previous month.

And data released this morning by the Council for Mortgage Lenders showed that homeowners borrowed £11 billion for house purchases in November, up 5 per cent month-on-month and 2 per cent annually.

Southern

Some good news for Southern rail commuters this morning after The Times reported that thousands could be in line for compensation from their credit card companies after a passenger claimed he had won £2,400 back from American Express for his season ticket. Consumer law could allow commuters who have bought season tickets on Southern rail with credit cards to claim back part of the cost. Fraud More than a third of Britons are worried about falling victim to fraud, according to new research released today. The poll also found that 12 per cent of UK adults (5.9 million people) have already been a victim of a financial fraud, while one in ten said that at least one of their online accounts has been hacked.The research, commissioned by Gocompare.com Money, revealed that for many people their passwords and PINs could be a weak point in their defence against cyberattack. Savers

Data from Moneyfacts.co.uk reveals that rate reductions in the savings market have now outweighed rate rises for 15 consecutive months.

In December, Moneyfacts recorded 21 savings rate rises. Disappointingly, rate reductions over the same period outshone this figure, with the number of rate decreases standing at 84 – which translates to four cuts to every rate rise – and some deals falling by as much as 0.6 per cent, much higher than the current Bank of England Base Rate of 0.25 per cent.