By bizn_fun 
The rising cost of goods and services has an impact on the money you save or earn. Inflation erodes the spending power of money you’ve got saved and – unless you get a pay rise – of your salary.
Analysts say the latest inflation data strengthens the likelihood of a cut in interest rates by the Bank of England’s Monetary Policy Committee on Thursday.
That should make it cheaper for consumers to borrow money, but bring lower returns for savers.
“Lower inflation is good news for household budgets, but it is a different story for savers,” said Sally Conway, savings commentator at Shawbrook Bank.
“Some savings will inevitably take a hit over Christmas. The key is what happens next. Once the dust settles, it’s worth checking whether remaining cash is working hard enough.”
Policymakers are trying to encourage more people to invest their money in stocks and shares – which they say is likely to bring higher returns over time than cash savings.
It is why the Financial Conduct Authority has given the go-ahead for targeted support – a scheme that, for the first time, allows banks and financial firms to give suggestions about where to invest your money.