Rising UK Consumer Prices: Here are the Categories Most Affected

The Office of National Statistics (ONS) recently reported a 2.8% 12-month inflation rate for the Consumer Prices Index including owner occupiers’ housing costs (CPHI) for September 2017. As the highest rate in more than five years, this number has made headlines; potentially more alarming are reported inflation numbers for particular sub categories of everyday household expense items.

Categories With Largest Price Rises

Digging deeper into the data exposes a number of products with exceptionally large price increases. In particular, consumers are paying 21% more for butter, 20% more for fresh, chilled fish, 14% more for bus and coach transport, 14% more for books (up to 76% more for e-book downloads/binding) and 13% more for car insurance.

In the following table you can see a list of products that cost over 5% more than they did a year ago.

CategoryPercentage Price Increase in Past Year (%)
Binding services and e-book downloads76.5
Fresh or chilled fish20.8
Liquid fuels16.5
Oils and fats14.9
Passenger transport by bus and coach14.1
All Fish (fresh, chilled and frozen)13.6
Motor vehicle insurance12.9
Fixed telephone equipment12.1
Olive oil11.9
Pizza and quiche11.5
Equipment for the reception, recording and reproduction of sound and vision11.4
Holiday centres, camping sites, youth hostels and similar accommodation services11.1
Boats, outboard motors and fitting out of boats11.0
Photographic services10.1
Travel insurance10.1
Coffee machines, tea makers and similar appliances9.9
Driving lessons, test licences and road worthiness tests9.5
Table linen and bathroom linen9.0
Margarine and other vegetable fats8.6
Refrigerators, freezers and fridge-freezers7.9
Books, newspapers and stationery7.1
Household furniture7.0
Dried fruit and nuts6.8
Garments for infants (0-2) and children (3-13)6.3
Furniture and furnishings6.3
Confectionery products5.6
Clocks and watches5.5
Dried, salted or smoked meat5.4
Pregnancy tests and mechanical contraceptive devices5.4
Lamb and goat meat5.3
Cinemas, theatres, concerts5.2
Edible ices and ice cream5.1
Clothes washing machines, clothes drying machines and dish washing machines5.1

Depreciation of the Pound

One factor contributing to rising prices is the depreciation of the pound. While some UK businesses were buffered by exchange rate protections a year ago, these protections are typically short-term instruments and have now expired. By the spring of 2017 these protections had largely run out, according to the ONS, so consumers are now feeling the pass-through effect of rising import prices.

Looking at FX changes over a similar time period as the CPIH window, comparing September 2016 to September 2017 the GBP lost 4.6% against the euro. Given 53% of UK imports came from the EU in 2016, consumers are certainly paying more for common household expenditures due to the devaluation of the pound.

Chart showing Pound Depreciated 4.6% Against Euro, September 2016 to September 2017
Pound Depreciated 4.6% Against Euro, September 2016 to September 2017

Depending on where you spend your household budget, you may be experiencing much higher price increases in some categories than the overall 2.8% year-on-year inflation number.



NimbleFins Newsletter

Get energy alerts, deals, tips, news, and more!