Sunday, April 20, 2008
Food prices are rising sharply in the U.K. - if not according to the government's statistics, then certainly according to this report in the Daily Mail after they went on a trip to the grocery store.
It can't be too different here in the U.S., yet there seems to be little coverage (if any) in the U.S. mainstream media like this.
The REAL cost of inflationAt some point in time, perhaps not long from now, more reports like this will be seen and heard in North America, though it has become increasingly difficult to measure food price increases due to the many and varied promotional offers and "club card savings" at large grocery stores.
The true, devastating scale of rising prices is revealed today - by the new Daily Mail Cost of Living Index. It shows that families are having to find more than £100 a month extra this year to cope with increases in the cost of food, heat, light and transport.
According to the Consumer Price Index, inflation is running at only 2.5 per cent. Yet the Mail's index finds that food costs alone are rising at 15.5 per cent a year - more than six times the official rate.
And there are double-digit increases in other "must-pay" essentials such as petrol, gas and electricity. Many families need to find more than £1,200 extra a year just to stand still.
Once higher mortgage costs are added, millions are having to pay out at least another £2,000 a year to keep their heads above water.
The Bank of England's chief economist Charlie Bean admitted last night that higher food and energy costs are likely to push the Consumer Price Index over 3 per cent this year.
Yet this rate fails to reflect the real problems in homes up and down the country because it includes the cost of luxury items such as flat-screen TVs, whose prices are falling.
It also fails to take increased housing costs into account.
The Mail's new index has been compiled in association with the price comparison websites uSwitch.com and MySupermarket.co.uk. It will be published monthly to chart the burden of "must pay" bills as families struggle to keep afloat in the midst of an uncertain economic period.
This week's cartoon from The Economist: