Some supermarket products were found to have increased in price by more than 100 per cent since 2020. Image: Pexels
The way inflation is measured will change to better reflect the real cost of living after campaigner Jack Monroe highlighted the true impact of expensive food on low-income families.
UK inflation hit a 30-year high of 5.4 per cent in December, while households across the country grappled with increasing food prices and soaring energy bills.
But some questioned how accurately the figures, published by the Office for National Statistics (ONS), reflected the disproportionate impact of inflation on low-income families, who are being hit hardest by the cost of living crisis.
Food writer Monroe compared the prices of low-budget supermarket staples a year ago to their prices now, and presented her analysis on Twitter – sparking a national conversation around why small average price increases could spell disaster for people in poverty.
“The margins are always, always calculated to squeeze the belts of those who can least afford it and massage the profits of those who have money to spare,” Monroe said, revealing price hikes of as much as 344 per cent.
That figure came from the cost of the cheapest rice in the supermarket, which had increased from 45p per kilogram to £1 per 500g.
Bread had increased by 29 per cent from 45p to 58p. The cost of canned spaghetti was up by 169 per cent, while the price of a bag of small apples had increased by more than half.
Monroe highlighted that for people already forced to rely on supermarkets’ budget options, sharp price hikes had a proportionally much larger impact on the costs of essentials than more expensive meals – and meant cutting down people’s budget food options even further.
In response to the public’s concern – and with the cost of living crisis set to worsen in the coming months – the ONS announced it would change how it measures the everyday costs of households.
The organisation will “transform” the way it measures prices in the long term, with plans to increase the number of price points analysed from 180,000 to into the hundreds of millions using prices sent directly from supermarkets. This will track the prices of every variety of one item, and how many people are buying each, to understand the real impact of inflation on shifting household budgets.
“If one variety of apple goes up in price while another apple falls, do some people switch varieties to avoid a price rise?” said Mike Hardie, head of inflation statistics for the ONS. “And given that people of different means undoubtedly buy different varieties of products, what happens to the price of own-brand versus branded baked beans?”
The ONS produces headline inflation rates every month by collecting the varying prices of more than 700 everyday goods and services bought frequently across the UK, ultimately analysing more than 180,000 price points alongside spending patterns.
It paused this kind of analysis – which meant looking at how the cost of living was rising differently for different demographics – during the pandemic, because supermarket shelves were empty and so many products indefinitely unavailable.
But these methods will now be reintroduced from Friday, the ONS said. This will mean analysing the same 700 products and services, but considering their findings alongside a range of different ways households spend their money.
The statisticians have observed huge price increases in some smaller items, Hardie explained, but their impact on headline inflation figures is limited compared to that of fuel bills and transport.
“The average annual rate of inflation can conceal a lot,” he said. “When you are regularly collecting 180,000 prices, you will observe a lot of variety. And over the past few months, there have been some large changes.
“Some items such as ‘fruit drinks’ and ‘low-fat spread’ experienced annual price increases of over 30 per cent on average in December, and when analysing the individual price quotes it’s not uncommon to see price changes of over 100 per cent for some items.
“Everyone has their own personal inflation rate,” Hardie added. “Some people may spend a larger proportion of their income on gas and electricity, or petrol if you commute via car daily.
“That said, when we have broken these data down in different ways, such as according to how much income you earn or whether you own or rent your property, the differences have been historically small.”
Jack Monroe was “delighted” by the announcement, adding: “And as for the large corporations paying poverty level wages to their employees, meaning that people who stack the supermarket shelves often can’t afford to purchase the products from them, don’t think you’re getting off lightly. The spotlight is swivelling onto you soon and all.”
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