Inflation

This Labour government changed the favoured method of calculating inflation so as to reduce the headline figure and so the costs of all benefits and allowances tied to the "rate of inflation". Housing costs are not included in the headline figure which has made the headline rate irrelevant as housing costs, both mortgage and rental, have increased way above the headline rate of inflation. Council Tax is not included in the headline rate of inflation either and that is another item not included in the government's preferred rate. So whilst DVD's, which are optional purchases, are included in the headline rate whilst housing costs and Council Tax, which are pretty hard to avoid, are not included.

Food is something that it is hard not to purchase, so the news that food prices have increased by 6% over the last year - the fastest rate for 12 years.

Factory gate inflation reached 3.8% in October according to the Office of National Statistics.

The above inflationary problems mean that because Gordon Brown targeted the Bank of England to keep to an inflation target ahead of all other factors, the future for the UK economy looks very bleak indeed.