FEATURED News8 Jun 2023
Have you noticed something different about us?
We are thrilled to announce the unveiling of our new brand identity, along with the complete rejuvenation of our website
Articles
Annual CPI inflation hit 10.1% in September
Annual CPI inflation hit 10.1% in September, but that does not mean every price is showing a double-digit increase.
Source: ONS
The September Consumer Prices Index (CPI) inflation reading is probably the most important inflation metric in a given year. Traditionally, this number is the one used by the Government as the basis for increasing tax allowances and bands, as well as benefits – including the state pension.
In recent years the significance of September’s CPI reading has waned, as the Government has chosen to freeze or restrict increases to limit the cost to the Exchequer of these benefits. The most obvious recent example is the freeze to the personal allowance (£12,570) and higher rate threshold (£50,270 outside Scotland), which would be £14,270 and £57,170 from April 2023 had the first two years of a four-year freeze not happened.
This year, the September 2022 annual inflation rate of 10.1% is more significant and not all it seems. The graph above shows the annual inflation rate in the 12 categories that make up the CPI ‘shopping basket’ of goods and services.
Variable effects
Only a third of those categories registered inflation above 10%. And another third recorded rises of no more than 5%. All the categories experienced higher inflation in September 2022 than September 2021, when the annual inflation rate was a more modest 3.0%, but the changes brought about over the intervening twelve months have had significantly varied effects across the different categories:
These large variations help explain why your experience of inflation may seem, at different times, better or worse than the headline figure.
The Office for National Statistics (ONS) recognises this fact and has recently introduced an online personal inflation calculator which is worth exploring.
More & Other Musings
View all related contentFEATURED News8 Jun 2023
We are thrilled to announce the unveiling of our new brand identity, along with the complete rejuvenation of our website
NEW Articles26 May 2023
The UK government has prepared a revised version of the audio-visual tax reliefs, which will be known as AVEC and will be implemented from 1 January 2024. This update, following the RDEC basis, aims to bring structure and clarity to... Read more
Articles25 May 2023
Analysis of the projected outcomes of the government’s tax policies show an expected increase to the number of higher rate personal taxpayers, with the corporate tax yield expected to grow substantially. Income tax The default policy for income tax has... Read more
Articles24 May 2023
The second ever Tax Administration and Maintenance Day (Tax Day) took place on 27 April, with the government publishing a range of technical proposals and consultations. The Tax Day announcements were grouped around simplification and modernisation of the tax system,... Read more
Articles23 May 2023
If you are self-employed, the new tax year may be longer than you think. If you are self-employed, until 2023/24, you have normally been taxed on the profits made in the accounting year that ends in the tax year. For... Read more