The average Isa allowance is set to rise by £480 next year after the Office for National Statistics announced that inflation measured by the retail prices index stood at 4.6 per cent in September 2010.
In this year’s Budget, former chancellor Alistair Darling announced that the average Isa allowance will rise in tandem with September’s RPI for the preceeding tax year. This means that the allowance should rise from £10,200 to £10,680 as figures will be rounded up to the nearest £120 in the next tax year.
HMRC has yet to confirm the rise but says it will publish its new rates in the near future.
Meanwhile, the consumer price index inflation remained at 3.1 per cent in September, above the Bank of England’s official target, according to the Office for National Statistics.
The European Union’s CPI figure was 2 per cent for the same period.
Upward pressures in the UK figure came from food as well as clothing and footwear, but the price of fuels, second-hand cars and air transport declined.
The stubbornly high level of inflation has led one member of the Bank’s Monetary Policy Committee, Andrew Sentence, to call for an interest rate rise.
However, the Treasury this week approved a new round of quantitative easing, sparking fears the buying power of sterling will fall and inflation will rise.