It has been revealed this week that UK inflation has hit a six year high, and now sits at 3.1%. High inflation can be a problem, and can cause life to get more expensive for everyone. Inflation – put simply – is the natural rise in prices over time. For example, if inflation is 10%, then something which is priced at £100 will be £110 next year, and £121 the year after that (assuming inflation stays at 10%). These price rises chip away at the spending power of your pound, so unless you get a pay rise in line with inflation, your wages will reduce in real terms.
High inflation puts pressure on many households, and indeed some are already feeling the effects of 3.1% inflation, particularly in the run up to Christmas. Below, we’ve set out four everyday expenses which have been most affected by this recent rise in inflation, and added tips to help you beat the rising costs.
The Office for National Statistics (ONS) have released figures which show that food prices are up by 4.1% compared to a year ago. It’s likely you have already noticed the rise in the cost of food, particularly when wages have typically failed to keep up with this inflation. Many families are beginning to feel the squeeze when it comes to their weekly food shop. The price of meat and dairy products seem to have risen more sharply than other foodstuffs, and the amount of food you get in a standard ‘pack’ has been reduced by many producers. So what can be done?
Changing the way you and your family eat may not be the most desirable of tasks, but it can make a huge difference to your food shop costs. For instance, learning how to make certain dishes from scratch rather than buying ready-made can help, particularly if you are able to get the raw ingredients at a reduced price. Try to avoid expensive brands if you can, and consider shopping in bulk if you have the room for storage. If you have leftovers, then using these wisely can mean you get two meals for the price of one. For example, leftover tomato soup can be used as a base for pasta sauce the next day.
The cost of longer journeys is causing financial strain for many, especially as a large number of young people live far away from their families for university education or for better work prospects. Train travel has been rising in cost for years, so if you need to take a long journey it may be worth looking into domestic flights. Taking an aeroplane instead of a train can seem like the more expensive option, but flight costs have been reducing for a while now. Say you need to travel from Manchester to Exeter on 15th February 2018 – at the time of writing, a train ticket for this journey costs £109.00, but airfare for the same journey is just £34.99. Alternatively, if you’re happy to spend a little longer travelling, you can go from Manchester to Exeter for £12.00 on a coach.
Train fares are set to rise next year, so it may be time to seriously consider these alternative modes of transport to save costs. If you have no other choice but the train, try to reduce the amount of journeys you need to make, and look into season passes as these may be cheaper in the long run. Check to see if you’re eligible for one of the many railcards available – you may be surprised – and you could save 1/3 on fares.
Clothing and footwear have risen in cost by 3% this year, according to the ONS figures. A rise in clothing costs can be particularly hard on families with children, where clothing can be outgrown or worn out quickly. Saving on clothing costs can be quite easy, particularly if you’re happy to shop for second hand garments. Charity shops in more ‘upmarket’ areas and in city centres tend to have the best quality items, and you could buy a whole outfit for less than the cost of a single garment if you were to shop on the high street instead.
Alternatively, you could also attend or organise a local swish event, where people bring clothing they no longer want and get to take home something they do want instead. It can help to lay all of your clothing out in front of you and separate the garments you wear the most. As long as everything else you want to keep goes with these garments, you’ll always have a wearable outfit to hand. This can also help you to see what you may be missing to complete an outfit – you may only need to spend a small amount on one thing to open up more possibilities and get the most from your wardrobe.
Fuel prices are unfortunately set to rise by 3p per litre after a number of issues have impacted costs. Not only has inflation hit fuel prices, but a number of unlucky incidents affecting supply have also worked to push prices up. A terrible explosion at a gas hub in Austria, problems with supplies in Norway and the closure of a major North Sea pipelinehave all contributed to this sharp rise.
It is thought that unleaded may climb to 123.76p a litre and diesel could hit 126.21p a litre by Christmas. These prices are the highest we’ve seen since November 2014 and are likely to impact those who rely heavily on their cars to get around, as well as those who do a lot of travelling.
This is likely to affect everyone who uses a vehicle to get around, and will particularly impact those in rural areas who have little or no choice when it comes to public transport. While it may not feel like the right time of year to use the car less, there are still ways you can reduce your fuel consumption. Consider reaching out to those you know to see if car-sharing is an option for some journeys. For instance, a neighbour with children may be happy to share the school run, or a group of colleagues could take it in turns to drive to work. This could reduce your weekly mileage enough that you are not severely impacted by the rise in fuel prices. Wrapping up warm and walking your shorter journeys, as well as using public transport where possible, will also help to keep your fuel costs low.