Everyday, unavoidable costs hammer into our spending power

The cost of food and drink has increased by almost 5% over the past twelve months. Photo: REUTERS/Paul Hackett

With millions on pay freezes incomes are not rising - but our outgoings certainly are.

What's significant about this rise in inflation is that is slams into reverse five months of falls as we have wound-in from a peak of 5.2%.

We might all have our suspicions that despite all the shops screaming about discounting - prices seem to be creeping up.

Food and soft drink prices are up 4.6% over the 12 months: transport Fuel 4.8% - as we saw petrol hit record highs in the last month: Air fares 8% up one of the biggest annual rises, showing how those fuel costs quickly move into other areas of transport and production.

The next step these stats take is crucial on all kinds of levels.

In terms of the wider economy consumer confidence and spending power is one of the most vital ingredients to recovery prospects.

There is a feeling that this rise will be short lived and we will soon see prices and the inflation figure return to that longer term trend downwards - though still well above the governments target of 2%.