HOUSEHOLDS in Ipswich are likely to face an above inflation hike in taxes this year, The Evening Star can reveal today.Despite analysts' fears that deflation may take hold in the UK, potentially prompting pay freezes or even wage cuts, council tax increases in Ipswich could rise by up to 3.

HOUSEHOLDS in Ipswich are likely to face an above inflation hike in taxes this year, The Evening Star can reveal today.

Despite analysts' fears that deflation may take hold in the UK, potentially prompting pay freezes or even wage cuts, council tax increases in Ipswich could rise by up to 3.7 per cent.

This would mean an average band D household in the town stumping up an extra �56 a year.

Inflation is currently running at 3.1pc but is widely predicted to plummet sharply taking into account cheaper fuel prices and big discounts on the high street.

Some experts fear the economy could even enter a period of deflation - prices falling rather than rising - a situation that can push down pay.

However The Star has learned that council taxes in the town could rise by between 3.2pc and 3.7pc this year.

The predicted hikes comes after it emerged Ipswich Borough Council are looking to increase their 20 pc portion of the council tax by around 2.95pc - roughly the same as last year.

Meanwhile newly released papers reveal Suffolk Police Authority wants to push through a five pc increase to supplement their 10 pc claim of the council tax pot.

Suffolk County Council refused to reveal how much extra they want a year but have previously said they will endeavour to keep an increase below 3.75 pc.

Claiming the majority of monies collected (70 pc), proposed increases by Suffolk County Council will go a long way to determining the overall level of council tax.

Some sources believe the Tory administration will try and keep pace with neighbours Norfolk (2.95pc increase) by levying an increase of around the 3pc mark.

This would mean an overall council tax increase of 3.2pc for Ipswich but would likely trigger more than �2million in efficiency savings being made elsewhere in the county's budget.

Finalised details of the council tax figure for Suffolk are set to be made public on Wednesday.

Will you feel the pinch if council tax goes up? Write to Your Letters, Evening Star, 30 Lower Brook Street, Ipswich, IP4 1AN or e-mail eveningstarletters@eveningstar.co.uk

A 3.7pc hike would mean a band D property costing �1,578.26 a year - �56.54 more than last year.

A 3.2pc increase would raise band D council tax by around �48.49 - however this would only happen if county bosses make drastic savings elsewhere.