No respite from relentless rise in prices
17th August 2022 08:08
by Myron Jobson from interactive investor
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Inflation continues to wreak havoc on personal finances, says ii's senior personal finance analyst.
Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “There has been no respite from the relentless rise in prices, which has hit double figures sooner than when many expected. Inflation is running red hot and continues to wreak havoc on personal finances.
“Prices continue to rise at their fastest rate in 40 years, with the soaring cost of food – particularly bread, cereals, milk, cheese and eggs - fuelling inflation the most last month. The rising cost of energy and fuel are among the other biggest drivers of inflation. The impact of inflation is not felt equally by all consumers. Given the greater proportion of household income that poorer families dedicate to these areas of expenditure, it has affected them more.
“The jump in wages has failed to keep pace with inflation under the cost-of-living crunch, meaning that we are spending an increasing amount of our pay packets on bills and everyday essentials, while the amount left over for discretionary spend, such as eating out and socialising, is eroding at a rate many consumers have never experienced in their lifetime.
“Those on the lowest incomes are at the mercy of rapidly rising costs - with many having little option but to make stark sacrifices to maintain financial buoyancy. We have seen troubling reports of people skipping meals to weather rising prices. The harsh reality is those living on a bare bones budget simply cannot make any further cuts to expenditure to weather escalating cost of living pressures.
“The cost-of-living squeeze is set to become more acute come autumn, with the energy price cap set to rise further. The government’s cost of living support measures will not stretch far enough to shield the most vulnerable members of society from the eye-watering price rises from all corners. With the worst yet to come, it remains important to take steps today to bolster financial resilience now to give you some peace of mind in the coming months.
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