12 February 2008
FOOD AND FUEL PRICES CONTINUE TO PUSH HEADLINE INFLATION
HIGHER
Alliance
Trust’s independent study has found that the inflation rates facing all five of
its identified age groups remained above the official headline rate of
inflation, based on latest figures released today (Tuesday). These figures show
that in January, inflation hit the 50 to 64 year olds and the 65 to 74 year
olds the hardest – these two groups have the highest inflation rate at 2.9%
compared to the latest official headline rate of 2.2%.
·
In January,
all age groups faced an inflation rate higher than the official rate of
inflation. A combination of higher food and fuel prices offset ongoing declines
in utility prices. Food price inflation is 6.6%, the highest since June 2001.
·
The
50 to 64 year olds face the same inflation rate as the 65 to 74 year olds. Both
age groups face the highest rate of inflation, at 2.9%. This is 32% higher than
the official headline rate of 2.2%.
·
For
both age groups, rising food and fuel prices are the primary source of
inflationary pressures. Prices of dairy products have increased by more than
15% over the last year. Fuel prices are running at record high levels,
currently over 19%.
·
The
youngest age group, the
under 30s, faced the lowest level of inflation in January. Their rate of
inflation was 2.5%, which is still 14% higher than the official headline rate
of inflation. The under-30s are benefiting from falling prices of clothing and
audio-visual products, but still feel the pressure from higher fuel, education
and rent costs.
The inflation rate facing the under 30s stands
at 2.5%. However, this is still 14% higher than the official headline rate of
inflation. Young households are benefiting from falling clothing and
audio-visual product prices, as they spend a high proportion of their household
budget on these goods. Clothing prices have fallen 5% over the last year and
audio-visual prices have declined almost 16%. But at the same time they still
face pressures from higher fuel, education and rent costs.
Shona Dobbie, Head of the
“The official headline rate of inflation
picked up over the month and inflationary pressures remain strong for many
basic goods which we all have to buy on a regular basis. This makes inflation
feel much higher than the official level, and leaves less money left over to
spend on the more discretionary items, such as clothing and audio-visual goods
where prices continue to fall. Recent increases in both gas and electricity
prices are likely to push headline inflation higher in the coming months. This
is a problem for all age groups, but as the over 75s spend the highest
proportion of their household budget on these goods, they could be hit the
hardest.”
You can obtain a copy
of the report by emailing contact@alliancetrust.co.uk or phoning
08000 326323.
Notes to editors
1.
2. The
Research Centre is part of
3. Photographs
of Shona Dobbie are available.