Inflation more like 10%: expert

The "real" rate of inflation for middle class households is more than four times the Government's official rate, it has been claimed.

According to Professor Richard Scase, an economist at the University of Kent, inflation for the middle classes is as high as 10% due to huge price hikes in the cost of energy, council tax and school fees.

Prof Scase believes the Consumer Price Index (CPI) - the benchmark measure for inflation - is meaningless for millions of consumers.

The CPI is compiled by officials at the Office for National Statistics using a "basket" of 650 goods. However economists argue that this method fails to take into account many of the trappings of middle class living.

Prof Scase said soaring oil prices had a greater impact on wealthier consumers who were more likely to have larger houses and so use more energy and bigger cars which use more petrol.

He told the Sunday Telegraph: "On my calculations, if you go out for a meal once a month, if you have something done to your car or house once a year, if you've had two hikes in your gas prices, then inflation for you is running at about 10%."

Last week the Government announced that the official rate of inflation fell to 2.4% in July from 2.5% the previous month.

Douglas McWilliams, the chief executive of the Centre for Economic Research told the paper: "There is a lot of cost push from energy price rises which simply has not been picked up by the CPI."