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Cost of living in UK at an all time high

todayApril 23, 2022 2

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Supermarket prices are not immune to the scourge of inflation. Shoppers are returning to stores to discover that their old favourites have increased in price from one week to the next. Consumer goods prices are rising at such a rapid pace that retail analysts have coined a new term, shelf shock.

 

Nestlé, the parent company of KitKat, Häagen-Dazs, and Felix cat food, became the latest consumer goods company to warn of more pain to come on Thursday, stating that it had raised prices by 5.2 percent in the first three months of this year and that rising production costs would force another increase soon. Increases in energy and fuel bills, packaging, and raw materials are being passed on to customers by retailers and manufacturers. According to market analysts, Assosia, the cost of a basket of basic commodities in the UK has risen by more than 11% since last March. Basic pasta, milk, and instant coffee have all increased by double digits.

 

According to data, a larger-than-expected drop in March retail sales was followed by a slowdown across the economy in April, with businesses facing record inflationary pressures. The Office for National Statistics (ONS) reported that retail sales volumes in the United Kingdom fell by 1.4 percent in March, following a 0.5 percent drop the previous month as shoppers adjusted to rising costs. City economists had predicted a 0.3 percent drop. The drop in demand occurred before shoppers felt the impact of April’s cost-of-living increases, which included a 54 percent increase in the cap on household energy bills and a 1.25 percentage point increase in national insurance contributions. “Retail sales fell back notably in March, with rises in the cost of living hitting consumers’ spending. Online sales were hit particularly hard due to lower levels of discretionary spending,” said Darren Morgan, director of economic statistics at the ONS. Separate data from S&P Global and the Chartered Institute of Procurement and Supply (Cips) showed that growth in the UK private sector had slowed to its slowest rate in three months due to high inflation and the Ukraine conflict.

 

In March, inflation reached 7%, the highest level since 1992, against a backdrop of soaring global energy prices and rising weekly grocery prices, and is expected to rise further this month following a record increase in household gas and electricity prices. With petrol and diesel prices at an all-time high last month as the Russia-Ukraine conflict reverberates through global oil and gas markets, fuel sales in the United Kingdom fell 3.8 percent in March as households cut back on non-essential travel. According to the ONS, online spending as a percentage of total sales fell to 26% in February 2020, the lowest since February 2020, just before the Covid-19 pandemic spread, as consumers returned to shopping on the high street and families cut back on non-essentials. During the lockdown, online sales skyrocketed, reaching a high of 37.1 percent in February 2021. Although spending is expected to fall as the economy recovers, it is still much higher than it was before the pandemic, when online retail accounted for about a fifth of total sales.

Written by: Relaks Radio

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