NEW data has this week revealed the rate of inflation increased to 2.9 per cent in June – the highest level in 14 months.
The Office for National Statistics (ONS) said the rising prices of fuel and clothing were the main factors in pushing the consumer prices index measure of inflation up from 2.7 per cent the month before.
Rising costs – sometimes outstripping wages – mean consumer power is reducing, and savers are being hit, too.
We want you to tell us how the increasing cost of living is affecting you by commenting on this article.
Here is what a selection of people in our area think…THE EXPERT
Local financial adviser Dawn Jones says:
"People are looking at more adventurous ways of saving, and for those who are particularly risk averse, more and more people seem to be looking to premium bonds. "People are less inclined to buy property as an investment because of the downsides involved. The returns are certainly lower now than they used to be, as buyers have to pay more for the property initially but overall it is still a good long-term investment. I'm also finding that people are less concerned about the stock market risk now. The returns on cash deposits are so poor that people are willing to give it a go again. It all depends on the level of risk that they are comfortable with.
"The one thing all financial advisers would stress to investors is the importance of diversity so that you have all your bases covered. That way you avoid the big peaks and troughs in the market."THE BUSINESSWOMAN
Jewellery store owner, Karen Webb-Meek:
INFLATION is rising all the time and the cost of the commodities that we all use continues to get more expensive.
However, because the increase has been so gradual it hasn't had a huge impact.
The bigger retailers tend to combat inflation by making the pack sizes smaller rather than increasing the cost of the product so the customer doesn't really notice that inflation is creeping up.
Retailers are aware of inflation, but the price is not always passed onto the customer.
We have seen a huge increase in the past five to seven years in the wholesale price of gold and silver, which has made gold and diamond jewellery ridiculously expensive.
When the economy is not doing very well people start investing in gold and silver and that forces the prices up. When we first set up in business eight years ago a silver cuff bangle would retail at about £25 to £45 and they are now £155.
What some manufacturers do is create designs that are thinner and hollower. It's not as heavy but it still looks nice.
We still stock the heavier, more expensive, items and we pass the price increase onto the customer, but we are also buying clever and approaching companies that are offering cheaper jewellery that is manufactured in a lighter way.THE FARMER
Andy Hay
THE inflationary pressures we have had in recent months have been a lot greater than what the Government statistics are showing, because we have been hit by bad weather.
Profit margins have been down because of the drought followed by the deluge, and the bad winter followed by the cold spring, which hasn't allowed things to grow.
The yield from the fields has not been as good has it could have been. Overall, our turnover is up and our profit is down, with the exception of potatoes, where our turnover is down but our profit is up.
That is because the inflationary pressures on potatoes have been more than 100 per cent, and so instead of buying a 25 kilo sack of potatoes for £11, which would have cost them £6 a year ago, customers are going for the smaller option and buying smaller bags more often, which means they are paying more in the long run.
Due to the cold spring, locally-grown produce, such as iceberg lettuce, cucumber and tomatoes, didn't have a chance to grow so we had to rely on foreign produce well into the spring and we had to pay the price for that.
The weather has taken a turn for the better and we are seeing the benefits of that as produce is now much more plentiful and, hence, much cheaper.
What do you think?
