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Inflation could be enflamed by the Bank of England’s decision to cut interest rates, a price comparison website says.
Fool.co.uk said while the decision to lower the cost of borrowing by to 5.25 per cent was ‘not unexpected’, it could make inflation worse in a time of soaring energy bills and oil prices.
The site says the Bank’s monetary policy committee seems ready to forgo the need to head-off inflation to try and avert a recession.David Kuo, head of personal finance at Fool.co.uk, said: “However, consumers should be aware of the damaging effects of inflation even if the Bank of England chooses to ignore it for now. In order to beat rising prices, we need to ensure any savings we have will guarantee a better return.”

Meanwhile, the Bank predicts demand for secured loans will rise in the first quarter of the year as other credit avenues close off.

Energy bills for some households will go up again thanks to the latest provider price hike.
The average bill for a dual fuel customer with E.On is set to rise from £913 to £1,063 say experts uSwitch.com.Its price rises are planned to come in on February 8th, when E.On, formerly Powergen, becomes the latest in a series of power companies to up prices.

Ann Robinson, director of consumer policy at uSwitch.com, said all but one of the major suppliers has upped prices in recent months. Scottish & Southern Energy has issued an assurance that its hikes would be delayed until late March.

She said: “With savings of up to £325 to be made, now is the time for consumers to really start making competition work for themselves.”

The Observer newspaper recently reported that many Britons could end up to taking out debt consolidation loans in 2008.

February is a danger month for people using credit cards overseas, says a leading building society.Nationwide believe couples heading abroad for Valentine’s Day contributed to £27m in unnecessary charges in February last year.

It advises credit card customers to avoid providers who charge for using cards overseas and to use debit cards instead, as this may be cheaper than using a credit card while on holiday.

Holidaying consumers are also being warned about Dynamic Currency Conversion - where the cardholder is given the option to pay in sterling or local currency - as retailers can often determine exchange rates.

Nationwide’s Jeremy Wood said: “Couples planning to go abroad for a romantic getaway for Valentine’s Day should be aware of the hidden charges most card providers impose, which are both costly and unnecessary.”