INFLATION DOWN BUT THERE'S NO END TO PAIN YET

HOMEOWNERS COULD FACE TWO MORE RATE RISES

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INFLATION has fallen below 10 per cent, official figures revealed today, but homeowners were warned they could be hit with two further interest rate rises this summer.

The headline rate of CPI inflation dropped to 8.7 per cent in April from 10.1 per cent in March — its lowest level since March last year. But the decline was less than expected in the City which had pencilled in around 8.3 per cent.

Worryingly, core inflation, which excludes energy, food, alcohol and tobacco, rose by 6.8 per cent — up from 6.2 per cent in March, and at the highest rate since March 1992. Food price inflation also remained near a 45-year high, just above 19 per cent, piling more economic misery on millions of families.

The cost of white sugar has risen by 47 per cent, eggs by 37 per cent, frozen beef burgers 36 per cent, cheddar cheese 39 per cent, baked beans 41 per cent, spaghetti or pasta 22 per cent, semi-skimmed milk 33 per cent and onions 23 per cent. So although there was relief that overall CPI inflation had fallen below 10 per cent for the first time in eight months, its “stickiness” triggered warnings that many homeowners could see their mortgage bills spiral even higher.