Could Britain be rewinding to the inflation-ridden 1970s?

Stuck in these sanitised, social media-driven times many will hark back to the good old days of the 1970s.

Watching countless reruns of The Sweeney, The Professionals and early Minder episodes transports one back to a wokefree world of smoking, drinking and innuendo. If that’s your idea of fun.

In truth, my recollections of that era are rather hazy. Not because I was indulging in the period’s questionable hedonism, rather I was too young to remember much of it.

What I do recall, besides the regular blackouts, were the heady rates of inflation, exemplified by my mother moaning about soaring prices every time I was dragged to the local Co-op.

And it’s that unwelcome 70s throwback that’s rearing its head once again. Yesterday’s official data showed inflation rising for its fourth consecutive month to a near-threeyear high. The annual rate of consumer inflation – the most closely watched measure – jumped to 2.5 per cent last month from 2.1 per cent in May. That takes it further north of the Bank of England’s long-held 2 per cent target.

Surging petrol prices, higher second-hand car costs and bread and cereal price hikes fuelled the latest increase.

The figures followed a warning shot from across the Atlantic a day earlier, where the US headline annual inflation rate shot up to 5.4 per cent – nearly four times higher than it was as recently as January.

So, should we worry about the current spike?

It seems many of us already are. Research this week from Aegon, the Edinburgh-based financial giant, suggests that lurking inflation is causing concern with consumers, and those with memories of the 1970s are more than twice as likely to dwell on it as they see their savings eroded.

Inflation forecasting is a thorny business and opinions are divided over whether interest rates will need to be jacked up before the year is out. I suspect they will.

We are, thankfully, some way off those 1970s’ inflation peaks of almost 25 per cent. However, higher prices and borrowing costs could bring consumers out in a sweat this summer.