Even essential living costs are soaring

TAX hikes and rising housing expenses are forcing up living costs at more than twice the inflation rate, new figures show.

The average household now spends £845 a month on bills, up 5.7 per cent on a year ago.

This is more than double the current official consumer price inflation rate, which stood at 2.6 per cent in the year to June. Rising house prices are forcing people to take larger mortgages and pushing up costs despite low interest rates, while rents are also rising.

Home and motor insurance costs are accelerating sharply too after repeated hikes in insurance premium tax (IPT).

Former Chancellor George Osborne and successor Philip Hammond have increased IPT three times since November 2015, doubling it from 6 to 12 per cent.

The average motorist now pays £732 a year for insurance, while household cover averages £147. Drivers face other cost pressures with the price of petrol rising 10 per cent to £100 per month.

The average electricity and gas bill is £1,128 a year, also up sharply, according to CompareTheMarket.com’s latest Billflation Index.

Commercial director Simon McCulloch said the rising cost of staples such as housing, energy and driving are outstripping wage growth: “However, households could save hundreds by taking the time to search for better deals on energy, insurance, mortgages and groceries.”