26th Mar 09
Everyday items costing more in recession
by Harry Oldfield
www.bls.gov/CPI
The average UK consumer is having to pay more for items such as food, petrol and air fares, even in the current recession, new figures have revealed.
Despite predictions that Britain would be hit by deflation, the price of groceries, petrol and alcohol have increased, leading the Consumer Price Index (CPI) to show an unexpected rise from 3.0 to 3.2 per cent.
A sharp decline in mortgage repayments has caused the Retail Prices Index (RPI), which includes housing costs, to drop to zero – for the first time in nearly half a century.
It had been predicted by economists that both inflation measures would fall.
According to the Office for National Statistics, the rise in the CPI was due to inflation in food and drink prices, which showed an annual increase of 11.5 per cent in February.
The cost of fresh vegetables has soared by 23.8 per cent, largely due to the volume of produce that is imported at this time of year.
It is certain that UK shoppers who have faced job cuts or pay freezes will feel the impact of these increases.
The weakness of the pound is being blamed for the rise in inflation. In the past year, the pound has lost nearly 25 per cent of its value against other major currencies, making it more expensive for UK consumers to purchase imported goods.
For more information about this article please visit news.scotsman.com.
www.bls.gov/CPI
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