Although CPI only went up 2.8% in July, total prices have gone up 10% in last 3 years. Some of the biggest rises have been in government regulated prices such as utilities, transport, taxation and education. As consumers have been forced to spend more in these areas, they have had to cut back on basic food and drink and eating out. In addition, unnecessary spending on household upkeep and recreation have been reduced by many.
Pete Comley, author of Inflation Tax, said: ‘People should not be lulled into a false sense of security by the latest annual inflation figures. We you look at them over a few years, you realise how much prices are really going up.’ He continued: ‘When you look at the detail of the latest report you can clearly see from it that the largest price increases are mainly in areas that the government has some regulation over. People should be aware that it is in the government’s interest to have higher inflation, as it is only credible way for them to deal with their ever increasing debts.’
The detailed CPI price rises over the last three years by key divisions are:
Statistical note: The above table was compiled from the latest ONS July2013 Consumer Inflation report and shows the change in CPI price index over the last 3 years. The scatter chart uses this data together with the change in the annual CPI weights over the last three years published in that report (which are derived from actual consumer spending).