Inflation rate hits 4.4%

Wednesday 25th April 2007, 12:00AM BST.

THE cost of living has hit a two-year high. The Retail Price Index figure for the year until March, released this morning, was 4.4% – up on the December figure of 3.7%.

The increase was driven largely by housing costs and the three Bank of England interest rate rises in the last 12 months, but food, motoring and leisure prices also contributed to the total. The RPI(X) – inflation without house purchase costs – increased to 2.8%, just beyond the States target of 2.5% which was the figure for December. The main contributors to the 4.4% RPI rise were: Housing: 2.2% Food: 0.5% Motoring: 0.5% Leisure services: 0.4%. Prices of clothing and footwear, household goods and leisure goods actually dropped by between 0.1% and 0.2% over the last year.

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