UK Inflation remains at 3% in January

UK inflation remained at 3% in January, above the Bank of England’s 2% target.

While the latest Consumer Price Index measure is less than November’s 3.1%, the figure does come in above the prediction of 2.9% which had been expected from most economists.

Factors behind the latest CPI measure include fuel prices, food prices, and attractions costs. Petrol prices haven’t risen as quickly as this time last year, while the cost of entry to attractions has declined more slowly. The good news for your weekly shop is that food price inflation appears to be slowing.

Although inflation hasn’t increased, the continued level will be a concern for some people, especially at a time when wage growth is low. You may feel like your household budget is being squeezed, like you are getting less for your money.

Low interest rates combined with higher inflation is a potential worry for some savers. If you leave your money in a Cash ISA, your money could actually be losing value. With the cost of things going up 3%, your money growing at an interest rate of 1% isn’t useful.

With that in mind, it could be worth thinking about a Stocks & Shares ISA. Your money could grow based on the performance of the fund it is invested in. While there is risk involved, you can manage this through picking a diversified fund and setting out with a long-term strategy which can help to ride out fluctuations in the markets.

Is a Stocks & Shares ISA right for you? Find out more here.