The inflation rate is finally coming back down, but Martin Lewis explained that it may not all be good news.
Appearing on ITV's Good Morning Britain as he hosted the show alongside Kate Garraway, the Money Saving Expert founder explained that the rate of Consumer Price Index (CPI) fell from 11.7% in October to 10.7% in November. However, it still remains close to its highest level in 40 years.
Crucially, this doesn't mean prices are falling - it just means they are rising at a marginally lower rate. Martin said: "If something cost £100 last year, and let's say inflation is 10% for easy maths, it costs £110 this year."
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He added: "If inflation were to drop to 5% next year then that same item would cost £115.15. It would not be cheaper.
"So the whole concept of inflation coming down doesn't mean things go back to how they were. Things are still more expensive than they used to be.
"If your pay rises, which are what all the strikes are about, haven't kept up with inflation then your pay packet can buy less than it used to be able to buy. In real terms, you're having a pay cut."
He added: "Even though rate has come down from October to November, just in one month alone we still saw prices going up on average 0.4%."
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