UK inflation is expected to hit double the target rate in 2011, according to projections. Debt management company Debt Options give their reaction and how people can mitigate debt problems.
(1888PressRelease) March 04, 2011 - Leading debt management company Debt Options gave their reaction to news that UK inflation is expected to hit double the target rate with the Government's Consumer Price Index expected to climb to 4pc. Consumers will also be hit by the Retail Prices Index (RPI) jumping to at least 5.1pc. Some common household goods and services have also seen rises that far exceed both figures and as such, UK consumers now face extra pressure to cope with the cost of living. The news comes against a background 1,000 people seeking formal help every working day for debt problems in the UK.
UK households face prices rises for many staple goods compared to prices in November 2009. The cost of home-grown lamb increased by 11.7%; and butter shot up by 26.4pc. Fresh fish rose 11.5pc and processed fish 5.1 pc. Fruit is up by 6.7pc; tea by 14.6pc and coffee is by 5.2 pc. Soft drinks were also up by over a tenth of the price and clothing and footwear for all the family rose 11.pc. Families are also hit by an enormous rise in car insurance which is up 33.4 %. Debt Options spoke about the impact on the rising cost of living on consumers managing debt repayments:
"These increases can become more and more difficult to manage. Many are trying to pay for the mortgage or rent, utilities, keeping the family car on the road, paying for groceries and then trying to meet debt repayments on time. Some try to manage by paying for these using credit cards, but this can trigger a cycle of 'survival debt'. Over time, multiple repayments and compound interest means that whereas the cards initially seemed to help, many consumers end up coming to us for credit card help".
The increase in RPI is considered by some as a more effective measure of the real costs consumers will face. Senior economic forecaster Phillip Shaw of Investec even predicts the RPI could climb as high as 5.5pc which would make it the highest level since 1991. Price increases for common staple goods demonstrate that the cost at the supermarket or for everyday services like insurance can even far outstrip the RPI. The BRS team gave their comments:
"Everyone has their own unique reasons for finding themselves with debt problems, but price increases can make budgeting that much more challenging. When circumstances suddenly change, it can often be a 'tipping point'. Consumers made redundant, and/or those who took out additional credit to try to cope with the cost of living sometimes find they just can't hope to meet multiple commitments. For these consumers, an IVA can be helpful. There are other legal debt solutions, but IVAs are used precisely for these kind of larger, multiple debts. Managing one single monthly repayment can really help them to feel that their financial life is back under control, whereas before it seemed to be spiralling downwards. And whether it's an IVA or another debt management route, there is always a safe, legal solution to debt problems".
Any consumer looking for credit card help, IVA advice or any other support to find the best debt management solution can gain free, impartial and immediate advice. To speak to a debt management expert in confidence today, call Debt Options on freephone 0800 234 3065.
UK inflation is expected to hit double the target rate in 2011, according to projections. Debt management company Debt Options give their reaction and how people can mitigate debt problems. 
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