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Pensioner inflation is 'four times average'

5th December 2006

Inflation rises will place greater pressure on pensioners, an economist has warned.

Jonathan Loynes, the chief European economist at Capital Economics, has said that pensioner inflation is increasing at four times the overall rate for some pensioners.

In a new study, Mr Loynes has found that in the 12 months to October , increases in fuel bills prompted an 8.9 per cent increase in the cost of living for pensioners, compared to the 2.4 per cent official rate of inflation.

"There are very wide variations in inflation rates across different types of people," Mr Loynes told BBC Radio 4's Today programme.

"That variation may well be wider than normal at the moment because of sharp increases in things like energy prices, which of course some people are exposed to much more than others."

Although he said that it would be very difficult for the Bank of England to take such variations into account when setting the official rate of inflation, he also said that the study was intended to highlight these variations.