UK Inflation up by a half %. Is this really a surge?

Question

Or is it just scare mongering by the mass media?

Answer 1

No, a 0.5% increase in the inflation is actually a pretty big deal. The CPI rate increasing from 3.3% to 3.8% is pretty bad, the Bank of England is charged with keeping it at around 2%, so the fact that it's overshot by so much, and is still increasing is a problem. If people start expecting inflation then inflation itself has a tendency to spiral upwards, causing all sorts of problems.

I don't think a 0.5% increase is the end of the world but it's definitely a problem, and could well lead to higher interest rates.