It’s not just your savings which are hit by inflation

Posted on December 25th, 2011 | Categories - News

According to the Office of National Statistics (ONS), the average cost of Christmas shopping has increased by 7.5% since 2010.

Inflation has hardly been out of the news this year. High levels of inflation have badly affected people on fixed incomes or whose wages rises have not kept pace with the rising price of goods and services. Savers have also been hit hard as even the best savings interest rates have failed to maintain the real buying power of savings in the face of rapidly rising inflation.

As you sit down to Christmas lunch it seems as though even that has been affected by inflation in 2011.

The typical supermarket basket of Christmas food has risen in price from £99.80 last year to £107.30 this year.  While the official figures show inflation rate of 4.8%, the average cost of a Christmas dinner has risen by 7.5%.

There have been big rises in the cost of coffee, red wine and gammon, astonishingly the cost of cream crackers have gone up 51% since December last year.

The ONS does not collect figures on the cost of a whole turkey, but says turkey meat is generally around 4% more expensive.

Consumers buying less

Which? said four out of ten people are buying less food this Christmas as a result of increased prices.

Richard Lloyd, executive at Which? said: “Many people are buying cheaper versions of their favourite products, or even going without.”

Energy helpline also gathered reports which show, one in five Britons say they will either eat less or buy cheaper food this Christmas so they can pay their heating bills.

Energyhelpline chief executive, Paul Green, said: “Millions of people are being forced to scrimp and save to get through the Christmas period and for far too many it’s becoming a choice between heating or eating. It is a tragedy that families are being forced to rein in their celebrations this year because they are worried about rising energy bills.”

However not everything has increased in price. The ONS said that the cost of carrots has fallen 16 pence per kilogram, while potatoes are 7 pence a kilo cheaper.