What those inflation figures really mean
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http://www.theguardian.com/money/2015/jan/16/prices-ups-downs-inflation-groceries Version 0 of 1. Inflation hit a record low this week, plunging to just 0.5% a year, with the dramatic fall in the cost of petrol and a supermarket price war helping to cut shopping bills. Some economists reckon that Britain could soon move into deflation – where the average cost of goods falls year on year – for the first time in most people’s memory. But while statisticians talk of percentages and averages, what are the actual changes to real goods over the past year? With the help of mySupermarket.co.uk, Guardian Money went shopping to find the bargains, as well as the items that keep on going up. 1 Iceberg lettuce – down 28% Vegetables were down by 7.1% on average over the past year, said the Office for National Statistics. Weirdly, it’s iceberg lettuces that have seen some of the biggest falls, selling for an average 68p in December 2014, down 28% from 94p in December 2013. Indeed, the ONS figures show they now cost the same as in 1992. When we checked, our findings bore out the ONS data. For example, Sainsbury’s is selling single iceberg lettuces for 60p compared with £1 in January last year. Across the year they fell to 69p in May, then 60p in November. At Tesco they have fallen from £1 at the start of the year to just 49p today, while Aldi is offering them at just 39p. 2 Teabags – down 2.1% The average price for 250g has gone down from £1.99 to £1.95 since December 2013 according to the ONS – not the biggest of falls but welcome nonetheless. In the supermarkets, tea is mostly a branded purchase, with the battle between PG, Tetley and Typhoo, so prices move heavily according to individual promotions. For example, 160 Tetley teabags are £3 in Tesco, Asda and Morrisons, compared with an average £4.49 as recently as November. The ONS data also underscores another fact about prices – which is how many items shot up between 2007-2012 and have only recently begun coming back down. While the average price of teabags is down on last year it is sharply higher than the £1.48 average in January 2008. 3 Tomatoes – down 5.7% A kilo of tomatoes cost an average £2 in December 2014 compared with £2.12 in December 2013, said the ONS, although they are still seriously up in price compared with the £1.70 five years ago. A single loose tomato in Sainsbury’s is 15p compared with 16p a year ago, while in Tesco a kilo of salad tomatoes is £1.69 compared with £2 a year ago. 4 Cucumbers – down 24% Cucumbers are an amazing bargain. The ONS said the average price in December 2014 was 58p compared with 77p in the same month in 2013, so this has nothing to do with seasonality. Shoppers are paying the same as they were in 1989. In Tesco we found single cucumbers for 49p, compared with 65p a year ago. 5 Potatoes (new) - down 8.2% The ONS says the price of spuds tumbled last year. The average cost of a kilo of new potatoes was £1.57 last month – down from £1.71 in December 2013. Meanwhile the typical price of a kilo of “old” white potatoes fell from 93p to 79p over the same period. That is borne out by mySupermarket which shows, for example, a 1kg bag of Tesco Charlotte potatoes would have set you back £1.25 to £1.35 during most of last year, but were this week going for £1, while a 1kg bag of Asda baby potatoes was 78p – a 42% cut from the £1.35 priced at for several months of 2014. 6 Pork sausages – down 4.4% It’s a case of more bangers for your buck. The ONS says the average price of a kilo (that’s probably 12 to 16, or more if they are tiddlers) has come down from £4.97 in December 2013 to £4.75 last month. So what does mySupermarket say? It’s a mixed picture – a fair few price rises and no-changes mixed in with the price falls. But there have been some chunky reductions across certain lines: for example a 454g pack of eight Waitrose “Essential” pork sausages was this week £1.05, down from £1.40 for virtually all of last year. 7 Eggs – down 13.1% There are some cracking deals – but it’s at the non free-range end of the market where prices have really fallen. The typical price of a dozen medium (the old size 4) tumbled from £2.89 in December 2013 to £2.51 last month, says the ONS. However the average cost of a dozen large free-range eggs has stayed pretty steady: £3.06 last month versus £3.08 a year earlier. There have been a fair few price cuts at the budget end of the market: a pack of six Asda Smart Price mixed-weight eggs (“from caged hens”) was going for 55p this week after being either 89p or 93p all of last year. 8 Bread – down 15.7% The ONS says the average cost of a large sliced wholemeal loaf (800g) stood at £1.13 last month – well down on December 2013’s £1.34 and about the same as you would have paid in December 2007. It’s a similar story for an 800g sliced white loaf, where the typical price has fallen from £1.27 to £1.11 in the space of a year. Over to mySupermarket, where our first dive into the world of bread prices brought up a good one: Kingsmill thick-sliced white loaves – selling at an average of between £1 and £1.35 for all of last year – are 79p at Asda. 9 Televisions – down 10.5% The ONS says that the cost of television equipment fell by 10.5% last year. But the frenetic pace of product development means it’s impossible to compare prices today to those a year ago, says John Lewis. What is obvious to shoppers, though, is how it has become possible to buy giant flat-screens for a fraction of what they were a few years ago. For example John Lewis has a 55-inch LED TV (by LG) for £679 while Amazon has a 60-inch for £648. Tesco is selling a 19-inch Blaupunkt for just £79 and a 24-inch for £99. 10 Petrol – down 18.2% The biggest impact on household budgets is from the dramatic fall in the price of petrol, which can now be found for 99p a litre, although the average is around 108p, compared with 132p a year ago. The good news for motorists is that many forecasters are predicting the price of crude could stay low for years. – not least the giant oil companies – are predicting that the price of crude could stay low for a few years. AND WHAT’S ON THE RISE: 1 Landlines – up 6.25% The rising cost of phone line rental has outstripped inflation for years. On December 1, BT raised its prices by 6.25%, Sky by 6% and TalkTalk by 4.7%. BT also began charging for its previously-free 1571 service, which now costs £22 a year. 2 Rents – up 3% The average rent paid for a privately-rented flat rose by 3% in 2014, according to figures from letting agents Your Move and Reeds Rain this week. It said the average rent in December 2014 was £767, compared to £745 in December 2013. 3 Booze – up 3.5% and fags – up 8.2% The price of wine went up by 3.5% on average over the past year, according to the ONS. A 175ml glass of wine now costs £3.44 compared to £3.22 a year ago. Meanwhile, 20 king-size cigarettes have jumped from £8.04 to £8.70. 4 Olive oil – up 12.5% The price of olive oil is soaring after the worst harvest in a decade. Spain, the world’s biggest producer, saw its annual harvest drop by nearly 40%, pushing up wholesale prices 12.5%, although in supermarkets it’s a mixed picture – Waitrose “Essentials” olive oil is down in price over the year. 5 Train fares – up 2.5% Regulated fares went up 2.5% this month, but some fares are up 5.6%. |