Soaring inflation predicted for North

Households in the North could be facing an inflation rate way ahead of that for the UK as a whole it was claimed tonight.

Business advisors PricewaterhouseCoopers said people in the North were suffering more than the rest of the nation because of the region’s high energy costs and lower-than-average private sector pay.

Consumer Price Index figures released by the British government today show UK headline inflation hitting 4.7% in the year to August.

However, PwC said poorer households faced significantly high inflation of 5.7% because they spent proportionately more on food and domestic energy.

Although separate estimates for the North are not available, PwC said: “The region’s high energy costs and lower than average private sector earnings may mean some households here face CPI rates of close to 6% – twice the rate of two years ago.”

Philip McDonagh, chief economist with PwC in the North, said: “As food and energy prices have risen sharply, it is the poorest households who have faced the highest inflation rate.

“And with a quarter of a million Northern Ireland homes suffering from fuel poverty, this steady increase in inflation will put greater pressures on families already facing spiralling food and living costs.”

Recent falls in petrol prices had been of marginal benefit to the poorest households, he said.

“Only when lower oil prices feed through to domestic gas and electricity bills will the full benefits be felt by the poorest in society.”