Surprise increase in inflation is a cause for concern

Today's Headline of the Day comes from The Times and reaffirms the fact that the threat of inflation is very real.

Inflation surged by more than expected last month, raising fears that the Bank of England may be forced to raise the interest rate sooner than expected.

The Bank's target measure of CPI inflation jumped to 3.4 per cent, up from 3 per cent in February, and confounded economists' expectations for a rise to 3.1 per cent.

On Friday GDP figures, which will show how well the economy is doing ,are to be released. If these show that the recovery is gathering pace then it may give the BOE a green light to bring forward a decision to raise interest rates, as stated above. But if they do decide to raise them sooner rather than later they run the risk of derailing any form of economic recovery.

So watch this space......

In the meantime, for advice on how to protect your investments/savings from the threat of inflation view my earlier posts (below):

• Money tip #30 – One way to protect your savings from inflation, both tax and risk free
• 3 Quick Links – How to keep one step ahead of the stock market, How to protect your portfolio against inflation or deflation and a note on Japan