Life’s basics add to mix of a bleak winter ahead

INFLATION at a 40-year high is alarming in itself but what is of real concern is that food and non-alcoholic drinks were the biggest drivers of this rise – basics we all depend on.

This really underlines the fact that households are now facing a triple whammy this winter.

The first element is higher heating bills and that has been exacerbated by the fact that the Government’s support scheme is only going to last for six months until April.

The second whammy is higher mortgages. There is very little evidence to suggest that the Bank of England is going to let up on interest rate rises.

Clearly the Chancellor’s recent announcements have eased the pressure slightly on the Bank but there’s no doubt that many households are going to face much higher mortgage repayments particularly if they have to remortgage in the next year.

The third element which has now emerged is very strongly rising food prices.

The headline inflation figure was 10 per cent but food bills in many cases have risen at 14 or 15 per cent.

The Prime Minister’s decision to proceed with the pensions triple lock is surprising. It may prove difficult to push through when younger people are facing such enormous pressure on their finances.

The good news is that inflation will not remain at this level indefinitely. Households may still find it tough going as even modest rises in prices at already elevated levels are difficult to take.

We have been through periods like this in the past. We will come through this one. But I don’t think anyone can claim that the winter ahead is not going to be very challenging for most households.