Britons increasingly worried about rising costs

Most UK households expect the cost of essentials such as food, non-alcoholic drinks, electricity, gas, and motor fuel to rise considerably by the end of the year, says a new survey research on Wednesday (20).

A survey by Retail Economics has claimed that more than four in five (84 per cent) families are budgeting for an average rise of around £23 per week. The amount will equate to an additional £627 million per week which in turn will lead to a displacement in spending across other areas of the economy, says the research.

Households spend approximately £109 per week on average on food and non-alcoholic drink, electricity and gas, and motor fuel, according to data from the ONS. The recently-released Retail Economics research now shows that consumers expect this to rise by a fifth to some £132 per week before the end of 2021.

Consumers were found to be worried about the additional costs of supply chain disruption, CO2 supplies, energy costs and fuel shortages being passed onto them, with two thirds (67 per cent) concerned about rising costs of living. This is up from 54 per cent last month, with concerns about inflation now at the highest level in more than five years.

Nicholas Found, a senior consultant at Retail Economics, said: “Households are bracing a hefty squeeze on their personal finances heading into Christmas.

“Consumers have faced fuel shortages, delays in receiving goods and energy price increases in an incredibly short period of time. While some factors pushing up prices are merely temporary, the overall trend of rising costs for essentials will ultimately hit all households and disproportionately hit the least affluent the hardest.

“The rising cost of living is expected to displace spending on non-essentials, with consumers more likely to cut back than spend more on discretionary purchases going into next year.

“This points to household spending being pinched at a time when the economy needs consumers to drive the economic recovery.”

Official figures released today show that the rate of inflation in the UK had edged down slightly to an annual rate of 3.1 per cent in September, from 3.2 per cent in August. However, most analysts expect it to surge in the months ahead and force the Bank of England to intervene with a hike in interest rates.