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Gloomy news for people with debt problems

UK inflation hit a 16-year high of 5.2% last month, with energy bills responsible for much of the rise.

The Consumer Prices Index (CPI) rose from 4.7% in August.

Analysts expect this to mark a peak, believing inflation will slow because of lower oil prices and reduced, overall demand in the economy.

Last week, the Bank of England cut interest rates by ½% to 4.5% in a move co-ordinated worldwide.

Higher food and energy prices have been blamed for causing inflation to rise beyond the government’s 2% target.

Reduced economic activity, high levels of personal debt, rising unemployment and the debt problems relating to this – along with difficulty in getting credit should curb spending and reduce inflationary pressure.

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