Inflation: What is it and what does it mean for you?

Inflation: Supply problems caused by Russia's invasion of
 Ukraine sent prices through the roof.
Photo: Neil Hall/Reuters (Neil Hall / reuters)

Inflation has dominated the news for the past two years, but while it has played a key role in all our financial lives, a lot of people aren’t entirely sure what it is, why it soared so high, or what it means for them.

At its heart, inflation is a way of expressing how much less of a bang you’re getting for your buck over time.

The Office for National Statistics (ONS) tracks the price of a huge range of goods – from yoga pants to fishing rods. It looks back to how prices have changed over the previous year and expresses this as a percentage.

So 6.7% inflation really means prices have risen 6.7% in a year – or something that cost £100 this time last year costs £106.70 today.

By Sarah Coles.

Full story at Yahoo News.