The cost-of-living crisis is in the news every day – but have you ever wondered which everyday items have risen most in price?
As grocery price inflation rockets to more than 17% for the first time, increasing costs are having a significant impact on our lives. Those of us who haven’t changed our shopping habits face an average increase of £811 on our annual shopping bill.
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Why has inflation been so high recently?
Inflation has been an issue in the UK for more than a year. Consumer prices were 10.1% higher in January 2023 than they were one year earlier, according to the Consumer Prices Index.
Energy prices are a major driver of inflation, as household energy tariffs have been rising steadily. The prices of domestic gas and electricity have increased by 129% and 67% respectively in the past year.
Gas prices hit record levels following the Russian invasion of Ukraine on 24th February 2022. This was due to cuts in the Russian supply of gas to Europe.
The annual inflation rate hit an all-time high of 11.1% in October 2022. Although it has eased slightly at 10.1%, this hasn’t helped cash-strapped shoppers, who are facing grocery price inflation of 17.1%, according to Kantar.
The top five product price increases
During the past year, some products have been subject to massive price increases. Unfortunately, the majority are staples of the average household’s diet. The biggest price increase of any grocery item is low fat milk, with a 45.2% rise. This has led analysts at The Grocer magazine to suggest it may be classed as a “luxury” item if the trend continues.
The dramatic rise in milk prices follows almost a decade of issues for dairy farmers, who have accused retailers of keeping milk prices artificially low to attract customers. In 2015, farmers took cows into supermarkets to protest about rock-bottom milk prices, claiming they were struggling to make a living. Farmers say the price of milk today is a more accurate reflection of their own production costs. The average price of one pint is now 89p.
The second biggest price increase is sugar, which is 40.9% more expensive than 12 months ago. It’s no surprise that another dairy product, cheese, has suffered the third-highest price hike of 35.2%. The Grocer magazine reports that it now costs dairy farmers an extra £2,000 to produce one tonne of cheese compared with one year ago.
The fourth and fifth-highest price increases are eggs (28.8%) and butter (27.1%), which is a further reflection of the extra production costs incurred by farmers.
A survey of 1,000 shoppers by Harris Interactive reveals 86% of shoppers have become increasingly conscious of price rises in the supermarket. Around one-third are “extremely concerned” or “very concerned” about the rocketing costs of dairy products.
What other everyday items have risen most in price?
The price of bottled mineral and spring water has increased by 22%, while ready-made meals have gone up by 21.9%: many busy families who don’t have much spare time rely on microwave meals, with 5.4 million people in the UK eating them more than once a week, according to Statista.
The cost of jam, marmalade and honey has increased by 21.4%; pasta prices are up by 20.8%; and even bread, the staple of just about every British diet, has gone up by 19%.
A report published in December 2022 by the Office for National Statistics revealed around 50% of all UK households were buying less food in general. Low-income families have been hardest hit, with 61% of those in deprived areas buying less food today than 12 months ago.
Are people borrowing money to buy food?
Research carried out by the Money and Pensions Service suggested more than 12 million people in the UK had borrowed money to cover basic living expenses, such as food, for the first time in their life.
They have taken out loans to pay for grocery shopping, energy bills and mortgage or rent – 50% have borrowed for the first time. One in five consumers believe they won’t survive the next three months without credit.
Anyone seeking alternative ways of borrowing money may be considering a logbook loan secured on their vehicle to help them survive the current economic uncertainty: the use of logbook loans by UK consumers has increased by 61% since 2011. With an improved reputation following the Financial Conduct Authority, that introduced new measures to protect borrowers in 2017, responsible lenders give borrowers fair warning about the financial implications of taking out a loan to ensure they can afford the repayments.
Warning: Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk.
