Cut locks and cold ices

The heat­wave and the pent-up lock­down de­mand for a cool new look have boosted the high street

The Daily Telegraph - Business - - Front Page - finds Tim Wal­lace

In­fla­tion took a sur­prise lurch up­wards in July. So much for ex­pec­ta­tions that busi­nesses would try to tempt ner­vous cus­tomers back out with steep dis­counts. The price of heat­wave favourites such as ice cream soared. But sum­mer get­aways are cheaper, with flights and ho­tels cost­ing less than they did a year ago. Over­all the re­sult was a 1pc rise in prices across the na­tion. Here are the key fac­tors push­ing liv­ing costs up and down.

Hair cuts

As a shaggy na­tion emerged from iso­la­tion, the newly and un­hap­pily hir­sute made a bee­line for the bar­ber.

Un­der­stand­ably keen to get some cash in af­ter months with­out cus­tomers, and pay for the cost of ex­tra PPE, the em­bat­tled scis­sor-wield­ers hiked prices by 8pc for men and chil­dren, and 5.6pc for women.

Ice cream

Some­thing of a ne­ces­sity in hot weather, pent-up de­mand for get­ting out and hav­ing fun led to an ex­tremely sharp in­crease in ice cream prices.

The cur­rent records for ice cream only go back to 2016 but the lat­est in­crease of 16.7pc is far and away the big­gest in that time pe­riod.

Petrol

Fuel costs are a big chunk of house­hold spend­ing, par­tic­u­larly as pub­lic trans­port is out of favour.

A litre of petrol cost £1.11 on av­er­age last month, up from its re­cent low of £1.05 in May. Diesel showed a sim­i­lar pat­tern, up from £1.12 to £1.17. This is still way down from last sum­mer, when petrol was £1.27 and diesel £1.32, but the rise in re­cent months still con­trib­uted to the in­crease in head­line in­fla­tion. This new in­crease fol­lows a rise in global oil prices, though drivers will be dis­ap­pointed that the cost of fill­ing the tank did not drop more in the great­est oil bust of re­cent years.

Clothes

Hard-pressed re­tail­ers have been slash­ing prices in re­cent years as they com­pete to win cus­tom.

A big sum­mer sale had been an­tic­i­pated to en­cour­age shop­pers to re­turn to Covid-sani­tised stores. Yet for women and chil­dren prices are up com­pared with last sum­mer.

Richard Lim, at Re­tail Eco­nom­ics, notes that the surge in on­line sales may have kept the pres­sure off – typ­i­cally the cheap­est re­tail­ers do not sell on­line, so this favours slightly pricier clothes.

At the same time, busi­nesses such as M&S and Next have shipped stock to ware­houses for next sum­mer, in­stead of slash­ing prices to clear it now.

Home im­prove­ments

DIY is high up the agenda for fam­i­lies who have had more time than usual to con­sider their prop­erty’s decor.

Gar­den fur­ni­ture prices are up 7.5pc on the year, with out­door space more ap­pre­ci­ated than ever by home­own­ers.

In­te­rior fur­ni­ture, fridges, clean­ing equip­ment and irons are all ris­ers, too.

Pack­age hol­i­days

Steep de­mand for a sum­mer get­away com­bined with lack of choice and capri­cious changes in quar­an­tine rules sent pack­age hol­i­day costs up more than 5pc com­pared with last July.

It is the big­gest an­nual in­crease for this time of year in more than a decade.

‘Keen to tempt ner­vous Bri­tons out of self-iso­la­tion, ho­tels cut prices for the first month since re­open­ing’

Camp­ing equip­ment

With for­eign trips still tricky to ne­go­ti­ate, hol­i­days at home are more pop­u­lar. De­mand for camp­ing gear has pushed prices up 6.4pc, the high­est since 2016. The price of trips to camp­sites rose by 2.7pc.

Take­aways

Take­away meals be­came a favourite in lock­down, send­ing prices up rapidly.

The vogue did not end with the re­open­ing of sit-down restau­rants in July – prices are up 5.5pc on the year.

En­ergy

This is not a one-way story. In­fla­tion is still only 1pc over­all, and some prod­ucts are markedly cheaper than they were a year ago. Elec­tric­ity is down 2.1pc and gas 12pc, in large part the re­sult of cuts to reg­u­lated costs.

Ho­tels

Keen to tempt ner­vous Bri­tons out of self-iso­la­tion, ho­tels cut prices for the first month since re­open­ing.

A stay in July cost 4.7pc less than the same trip a year ago.

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