finance

UK inflation jumps to 5.4%, highest since 1992 – business live


Food and non-alcoholic drink prices made a much bigger contribution to inflation than we’re used to – with prices rising 5.4%. Within our trolleys there were some eye-watering rises, including margarine up 27.3% in a year, oils and fats 13.1%, sauces 11.6%, lamb 8.5%, low fat milk 8.2% and crisps 9%. When these essentials rise in price, it makes it far more difficult for us to cut costs. Once we’ve traded down brands or to a discounter, it’s a far more dramatic change to have to stop buying milk and margarine to cut costs.

Clothes prices bucked the usual December trend and actually got more expensive during the month. We typically see them drop between November and December in the pre-Christmas sales, as shops try to clear the shelves of partywear. However, this year prices rose, as stores tried to capitalise on the return of Christmas parties and celebrations. Clothes prices are up 4.5% in a year, and children’s clothes are up 5.5%.

Then there are a host of things that we don’t buy regularly, but if we need to buy them, we’re in for a nasty shock. Second-hand cars are up 28.6% in a year. Demand has been outstripping supply, leading to some eye-watering rises. Someone who bought a second-hand car a year ago is likely to find it’s worth more now than when they bought it.

Home improvements, including maintenance and new furniture continued to rocket in price too. as a result of a home improvement boom from more people spending more time at home, and ongoing supply problems. Materials for home maintenance are now 13.9% more expensive than a year ago, while home furnishings are up 12.5%.



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