17 November 2009
OVER 75s NOW FACE THE LOWEST RATE OF
INFLATION, FOR THE FIRST TIME IN ALMOST TWO YEARS; WHILST THE WORKING AGE GROUP
NOW FACES THE HIGHEST RATE OF INFLATION
·
Latest figures from
·
For the first time
in almost two years, the over 75s are currently facing the lowest rate of
inflation, at 1.7%. This is due to a combination of factors, including further
falls in the prices of both gas and electricity over the month
·
The youngest age group, the under 30s, face a relatively
low rate of inflation, of 1.8%, helped by ongoing declines in the prices of
clothing and audio-visual goods
·
During the month, gas
prices fell 0.2%, electricity prices fell 0.4%, clothing prices fell 0.6% and
petrol prices fell 0.7%. Meanwhile food prices rose 1.0%, the price of second
hand cars rose 1.1% and education costs rose 3.3%
This month’s official inflation report
showed that the headline rate of inflation rose from 1.1% to 1.5% in October. Alliance
Trust’s monthly study of inflation rates facing different age groups reveals that
each group continues to face a rate of inflation higher than the official rate,
and that these have increased sharply this month. For the first time in almost
two years, the over 75s are actually facing the lowest rate of inflation, at
just 1.7%. It is the 30-49 year olds who currently face the highest rate, at
2.0%. This rate of inflation is 33% higher than the official rate, and has been
boosted by relatively high inflation in transport costs, education fees and
second hand cars.
Shona Dobbie, Head of the
|
Age Group |
Inflation Rate |
|
Under 30 |
1.8% |
|
30-49 Year Olds |
2.0% |
|
50-64 Year Olds |
1.9% |
|
65-74 Year Olds |
1.8% |
|
75 and Over |
1.7% |
Utility price inflation remains negative
this month, at -7.1%, as electricity price inflation eased to -8.2%, and gas price inflation fell to -5.9%.
The temporary negative rate of inflation in both these categories continues to
help the over 75 year olds in particular, and is one of the key reasons this
group’s inflation rate is the lowest this month. The elderly spend more than 7%
of their budget on electricity and gas bills; whereas the under 30 year olds
spend just over 3% on these services.
The youngest age group continues to benefit
from a combination of factors, including ongoing deflation in prices for both
clothing and audio-visual goods. Prices in both categories have fallen by close
to 8% over the last year.
It is transport and education costs which
are currently hitting the working age groups hardest. Transport costs have
risen more than 4% over the last year, and education costs have risen more than
5%. In addition, the price of second hand cars is important to the 30-49 age
group, and this has jumped by more than 13% over the last year.
Spending
Weights
|
Age Group |
Food |
Electricity |
Gas |
Petrol |
Clothing/ Footwear |
|
Under 30 |
9.0% |
1.8% |
1.5% |
4.3% |
5.9% |
|
30-49 Year Olds |
10.9% |
2.0% |
1.8% |
5.0% |
6.3% |
|
50-64 Year Olds |
11.6% |
2.2% |
2.0% |
5.2% |
5.7% |
|
65-74 Year Olds |
14.4% |
2.7% |
2.5% |
4.6% |
4.7% |
|
75 and Over |
16.4% |
3.7% |
3.5% |
3.2% |
3.9% |
Note: This table shows the spending
patterns of different age groups across different spending categories
You can obtain a copy
of the report by emailing contact@alliancetrust.co.uk or phoning
08000 326323.
|
Contacts |
|
|
|
Clare Dundas/ |
|
Finsbury Group |
|
Tel: +44
(0)20 7251 3801 |
|
Email: alliancetrust@finsbury.com |
|
Web:
www.finsbury.com |
Notes to editors
1.
Alliance Trust PLC is a
self-managed investment company with investment trust status. A FTSE-100
company, it is the largest generalist
2.
The
3.
Photographs of Shona Dobbie are available on request.
4.
Inflation and age chart is shown below.
Inflation and Age (January 2007 to October 2009)
Source: In-house