Inflation

I know I have blogged about this before, but I will keep doing so. According to the BBC "Last month's Consumer Prices Index (CPI) inflation figure rose to 2.2%, up from 2.1% in December. The rate is the highest since June 2007."
The CPI is the government's preferred measure of inflation and the one they quote when working out the level of pay increases that they would prefer.

However as the BBC point out "The Retail Price Index (RPI), which includes mortgage interest payments, rose to 4.1% from 4% in December."

Now if you have a mortgage and you receive a pay rise in line with "inflation" of 2.2%, then you are going to experience a real terms drop in income.