Brits brace for £23 per week jump in cost of essentials as two-thirds fear inflation
UK households expect to cost of essentials such as food, non-alcoholic drinks, electricity, gas and motor fuel to rise as much as £23 per week by the end of the year according to new research shared with City PM this morning.
More than 4 in 5 (84 per cent) UK households expect the cost of essentials (including food & non-alcoholic drink, electricity & gas, and motor fuel) to rise by the end of the year.
In fact, the average amount they expect the cost of their essentials to rise by is £22.60 per week, according to the data from Retail Economics.
Across all UK households, this equates to an additional £627m per week which will lead to a displacement in spending across other areas of the economy.
According to data from the ONS, households spend approximately £109 per week on average on food and non-alcoholic drink, electricity and gas, and motor fuel. Our research shows that consumers expect this to rise by a fifth to some £132 per week before the end of 2021.
Households brace for essential costs to rise by £22.60 per week
Consumers are worried about the additional costs of supply chain disruption, CO2 supplies, energy costs and fuel shortages being passed onto them, with two thirds (67 per cent) concerned about rising costs of living.
This is up from 54 per cent last month (September 2021), with concerns about inflation now at the highest level in more than five years.
Two in three UK consumers have inflationary concerns
“Households are bracing a hefty squeeze on their personal finances heading into Christmas,” said Retail Economics’ senior consultant Nicholas Found commented: “
“Consumers have faced fuel shortages, delays in receiving goods and energy price increases in an incredibly short period of time. While some factors pushing up prices are merely temporary, the overall trend of rising costs for essentials will ultimately hit all households and disproportionately hit the least affluent the hardest,” he added.
“The rising cost of living is expected to displace spending on non-essentials, with consumers more likely to cut back than spend more on discretionary purchases going into next year,” Found continued.
“This points to household spending being pinched at a time when the economy needs consumers to drive the economic recovery,” he concluded.