Important information: The value of investments and the income from them, can go down as well as up, so you may get back less than you invest.

PETROL’S now 138.9 pence a litre, up from 113.2 pence just a year ago - that’s the highest in almost a decade. Electricity costs are up 18.8% and gas an eye-watering 28.1%. Dining out is getting more expensive, and have you seen what a drink in a pub costs nowadays?

Inflation figures in the UK out today, show annual price rises up at 4.2% - a big leap from last month’s figure of 3.1% and more than double the Bank of England’s target of 2%. And this is just the beginning, we’ve been warned. So how do you manage your money - and invest right - to withstand the spectre of rapidly rising prices?

You’ve probably noticed that life is getting a lot more expensive nowadays, thanks to a perfect storm of supply chain disruption, rising energy prices and too few workers for too many job openings push prices higher.

My colleague, Ed Monk, explains in this short video, why inflation aka rising prices is bad news - have a look.

If you want to know, what’s getting more expensive, the below graph from the Office for National Statistics, shows the main factors driving prices higher. As the big blue bar next to housing and household services shows, whether you rent or own your own home outright, living costs are going one way: up! And for those who’ve been contemplating buying a second hand car - it would have been 27.4% cheaper, had you bought the car back in April this year.

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It’s worth noting that the UK is not alone in this regard. Last week, figures from across the Atlantic, showed US inflation rising faster than at any point since 1990, at an eye-watering 6% year-on-year.

It’s a global phenomenon, as Chancellor Rishi Sunak was quick to point out to us all when he delivered the recent Budget speech.

Worrying as it sounds, it’s not the end of it either. The Bank of England expects prices to keep accelerating until inflation reaches a peak of around 5% next spring. There’s still the hope in some quarters that the spike in inflation will be temporary - or as economists like to call it ‘transitory’ but as investor James Thomson points out in the video below, it’s feeling all too permanent.

While the older generation have had a training in coping with rising prices - the inflation of the 1970s is still vivid in the minds of those over 50 - there is an entire generation of young people, who have never truly experienced inflation during their working lives, nor the impact of an interest rate rise, which is now all the more likely come December.

What’s arguably more concerning is the fact that inflation is returning against a backdrop of slowing economic growth, which brings the very real concern that stagflation might rear its ugly head. Here’s some investment ideas for you, if you want to know how to invest to weather a stagflationary storm.

Either way, today’s news will have many savers worried. As the economist Milton Friedman put it, ‘inflation is taxation without legislation.’

Important information: Investors should note that the views expressed may no longer be current and may have already been acted upon. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to a Fidelity adviser or an authorised financial adviser of your choice.

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