Food and fuel prices push inflation higher
Research by Alliance Trust has found that the inflation rates facing all five of its identified age groups remained above the official headline rate of inflation.
These figures show that in January, inflation hit the 50 to 64 year olds and the 65 to 74 year olds the hardest – these two groups have the highest inflation rate at 2.9% compared to the latest official headline rate of 2.2%.
In January, all age groups faced an inflation rate higher than the official rate of inflation. A combination of higher food and fuel prices offset ongoing declines in utility prices. Food price inflation is 6.6%, the highest since June 2001.
The official rate of headline inflation increased to 2.2% during the month, and our study shows that, all five of our identified age groups continue to face a rate of inflation which is higher than the official headline figure.
This is particularly severe for the 50 to 64 year olds and the 65 to 74 year olds. Both age groups face an inflation rate of 2.9%, which is 32% higher than the official headline rate.
Although temporary declines in gas and electricity price inflation have helped to reduce some of the energy cost pressures facing these age groups, they continue to be hit particularly hard by higher food and petrol prices. Food price inflation is now at almost 7%, the highest in nearly seven years. Fuel price inflation is currently running at over 19%, the highest level since records began in 1997.
Shona Dobbie, head of the Alliance Trust Research Centre, said: “Our study continues to highlight the extent to which the impact of inflation can differ from the official headline figure.
“The official headline rate of inflation picked up over the month and inflationary pressures remain strong for many basic goods which we all have to buy on a regular basis.
“Recent increases in both gas and electricity prices are likely to push headline inflation higher in the coming months. This is a problem for all age groups, but as the over 75s spend the highest proportion of their household budget on these goods, they could be hit the hardest.”