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Inflation increases from 3.4% to 3.5%

Inflation increases from 3.4% to 3.5%

Category: Economy

Updated: 17/04/2012
First Published: 17/04/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
Inflation figures released today show the Consumer Prices Index (CPI) rose during March, from 3.4% to 3.5%.

Higher food prices and the cost of clothing helped drive the increase, although inflation is still expected to fall in the coming months.

Inflation peaked at 5.2% last September, but had fallen for five months in a row before today's increase.

To beat inflation, a basic rate taxpayer at 20% needs to find a savings account paying 4.38% per annum, while a higher rate taxpayer at 40% needs to find an account paying at least 5.83%.

Today there is a choice of 50 standard savings accounts that taxpayers can choose from to negate the impact of tax and inflation.

The impact of inflation on savings means that £10,000 invested five years ago, allowing for average interest and tax at 20%, would have the spending power of just £9,204 today.

"CPI is on the rise again, and savers all over the country must be heaving one big sigh of frustration," said Sylvia Waycot, spokesperson for

"This disappointing rise means that there are now 50 standard savings accounts that negate the effects of inflation and the taxman's cut. The silver lining is that time last year there were only 25.

"There are 45 ISAs that beat inflation, obviously helped by their tax advantage, though they are limited by the amount that can be invested (£5,640 per annum).

"By comparison, there are then five non-ISA accounts that beat inflation, all of which are fixed rate bonds.

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