Rising inflation could affect accounts software

News Article - 18 June 2008
Category: Business

Rising food and energy prices are squeezing household finances in Britain and the governor of the Bank of England predicts that consumer inflation could reach four per cent in 2008.

According to Mervyn King, consumers must learn to live with higher prices and businesses need to adapt accordingly.

Effective accounts software solutions can help UK businesses to identify cost savings and manage their finances more effectively as consumer inflation rises.

Figures from the Office for National Statistics (ONS) indicate that the consumer price index (CPI) rose from three per cent in April this year to 3.3 per cent in May.

In a letter to chancellor Alistair Darling, Mr King warned that sharp rises in food and energy costs are pushing up inflation, which could top four per cent over the second half of the year.

The open letter indicated that the bank's rate-setting monetary policy committee plans to adopt a wait-and-see policy regarding the cost of borrowing, as the current inflation spike could be temporary.

If inflation rises over one percentage point above the government's two per cent target the governor of the Bank of England is required to write to ministers outlining his plans to curb increases.

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