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Britain is leading the way - in rising food prices and energy bills
Last updated at 08:52am on 04.07.07
Shoppers are paying 4.9 per cent more for their weekly groceries compared with a year ago
Shoppers are paying 4.9 per cent more for their weekly groceries compared with a year ago.
This is nearly double the increase of European Union and more than five times higher than France, said the Organisation for Economic Co-operation and Development (OECD)
British homeowners are also paying 4.4 per cent more for their electricity and gas, despite boasts from leading power companies they are cutting their customers' bills.
However, the average consumer in the rest of the European Union is only suffering a 1.5 per cent rise in energy bills.
And in parts of Scandinavia and Iceland these bills have actually dropped. Norwegian families now pay 13.7 per cent less than they did 12 months ago.
The figures came as another report suggested that four interest rate rises in the past 12 months are starting to hit consumers' pockets.
The Nationwide Building said that consumer confidence fell for the first time in six months during June and that consumers were more gloomy about the economic outlook than they were a year ago.
Homeowners are also paying 4.4 per cent more for their electricity and gas
Fionnuala Earley, Nationwide's chief economist, said: "The fall in confidence in June reflects some weakening sentiment about the economy and jobs both now and in the future.
"Higher interest rates are likely to be a major factor behind this as consumers recognise their impact on the wider economy as well as on their own pockets."
Homeowners are likely to be hit further in the next week if Mervyn King, the governor of the Bank of England, can persuade the monetary policy committee to vote to raise interest rates by a quarter per cent to 5.75 per cent.
It would be the fifth rise since August last year and will affect the 2.4 million who pay standard variable rate mortgages rather than fixed rates.
The OECD monthly inflation report shows that food and energy costs cooled in May. In April, food prices were up by six per cent and energy costs were up by 7.9 per cent.
However, increases in the cost of living in Britain remain stubbornly higher than nearly all our international peers.
Out of a group of 30 industrialised countries that form the OECD, only Hungary, Mexico and Turkey are experiencing higher levels of inflation.
British retailers claim that shoppers are not being ripped off by the higher prices and that any recent rises are because of poor harvest that have pushed up the prices farmers charge for everything from beef to tomatoes.
Utility companies also claim their bills merely reflect rises in the wholesale markets, with the price of gas and oil starting to creep back.
Of the industrialised countries only the United States experienced the same inflation pattern. The price of food rose by 4.4 four per cent and while the cost of energy increased by 4.9 per cent compared to a year ago.
The average cost of energy within the G7 countries rose by 3.1 per cent compared to a 0.3 per cent rise across the wider European region.
Reader views (4)
Glad to see Britain is "Leading the way". Now can we have the fuel escalator back? We are burning far too much fuel, in transport, heating and in industry. The best way to curb demand is to make the stuff so expensive that businesses and individuals make serious efforts to look for alternatives. And I don't mean just adding 5% bioethanol to our petrol.
A huge amount of fuel is used on commuting and business trips. Most of it is wasted. Encourage teleworking, video conferencing, even the old phone. I don't need a rep to bring me a catalogue, send it. Give me a price over the phone, stop charging around wasting fuel just to smile at customers.
Sort out planning and grants for building insulation and heating. My house is old and inefficient, but it's much cheaper to leave it that way and pay for wasted fuel than it would be to undertake the major work needed to change things.
Stop electing politicians on the basis of your very short term costs and look at the bigger picture.
- Phil Thane, Llangollen, Wales
It may not be generally known, but with Sterling now worth more than 2 dollars, an oil prices, in Sterling terms, are now lower than they were a year ago...and as oil is priced in dollars, how come we are not getting any benefit?
- Paul, London
It's stupid as people won't pull together on this and refuse to pay...there is no need for the extra increase, especially with energy bills! I'm still waiting for NP to drop their prices like they said they would, but it's not benefiting the consumer.
- Sarah, London
Rip off Britain - If this happened in France the roads would be blocked with protesters - in England we just keep coughing up, moaning and voting the same party back into power.
- Stuart, London
