- It has been five years since the cost-of-living crisis began with inflation jumping to 3.2% in August 2021 – and eventually reaching double digits
- Cumulative inflation has pushed up prices around 28% in five years, AJ Bell analysis shows
- Wednesday’s CPI inflation figure for July 2026 is expected to come in around the 3% mark
- Olive oil, mortgage interest and offal are some of the main offenders, with cumulative inflation rates of 116%, 152% and 76% respectively
Laura Suter, director of personal finance at AJ Bell, comments:
“This week’s inflation figures will show whether the recent easing in price rises is continuing, but for households the bigger issue is that many everyday costs remain painfully higher than they were before the cost-of-living crisis began back in 2021. Even if the headline rate of inflation has cooled from its peak, five years of cumulative price rises have left a lasting mark on family budgets: from the weekly shop to energy bills, insurance and vet costs.
“It’s been a rollercoaster ride for prices since the cost-of-living crunch began five years ago. In August 2021 we saw inflation begin to tick up and the cost at the checkout, pumps and even at the vets has risen from there.
“While there were some small reprieves during that time, where prices dropped back, there’s no denying that many costs are still dramatically higher than they were before the crisis began. We’ve crunched the numbers on the cumulative inflation on a number of products over the past five years to see what’s risen the most, and whether anything has actually dropped in price.
“When we dig into the basket of goods that makes up the CPI index, just 14 of the 192 categories are cheaper now than in July 2021 – signalling just how widespread the cost rises have been. While inflation will typically see prices rise gradually every year, some price jumps have been abnormal.
Olive oil – up 116%
“Olive oil is biggest offender, having increased in price by a whopping 116% in five years. Prices for the oil peaked higher than this, thanks to a combination of poor harvests and higher energy costs, before dropping back again. But, sadly for the keen chefs and nose-to-tail enthusiasts out there, the price hikes aren’t over. Edible offal came in second to olive oil, with a cumulative 76% rise, while the drought, poor harvest and extreme heat across Europe this summer means crops have been impacted again in 2026.
“Looking across the other food items in the basket, the Ukraine crisis and other global instability has led to an increase in fertiliser and feed costs – which impacts a number of other items. Cheese prices are up 42%, milk prices up 46% and butter is up 39%.
“Prices rises don’t just mean higher costs at the checkout. Food manufacturers have changed products as a result of increases, in order to keep costs down and protect profit margins. Chocolate is a clear culprit, with prices having cumulatively risen by 51% in the past five years. It means many manufacturers have moved to smaller bars, with less chocolate and still higher prices. A Mars Bar back in 1990 was 56% bigger than the ones that line shelves today – good for your waistline but not for your wallet.
Gas – up 63%
“Energy prices were the biggest initial shock for many households, with prices rising immediately following the Russian invasion of Ukraine in early 2022. It’s not been a steady path from there, with energy prices yo-yoing up and down as we’ve moved from one geopolitical crisis to another during the past five years.
“Energy costs have fallen back from their peak of the five-year period. Gas costs topped out at the start of 2023, but despite drops since then they are still 63% higher than five years ago. The government stepped in to protect people from these chunky increases, with a combination of price caps and handouts to households.
“Electricity costs saw a slightly more muted increase but still rose by 41% across that five-year period. Energy prices remain very volatile, thanks to the ongoing war in the Middle East – and this feeds through to many of the other price rises.
Mortgage costs – up 152%
“Any homeowner with a mortgage will have faced eye-watering cost increases over the past five years – gone are the days of ultra-low borrowing rates. While this measure sits in the RPI basket of goods, rather than CPI, the inflation rate for mortgage interest costs is a staggering 152% over the past five years.
“We entered the cost-of-living crisis with a low Bank of England base rate, but it ratcheted up rapidly to help combat rising inflation – meaning larger mortgage payments for much of the nation. Lots of people were initially protected from these price hikes by fixed rate mortgages, but most homeowners will have had to re-mortgage by now – with many seeing their monthly costs rising by hundreds of pounds. The average two-year mortgage rate for a homeowner with a 10% deposit has risen from 2.79% in July 2021 to 5.07% in July this year, according to Bank of England data. However, it peaked at over 6.5% during that period – so homeowners faced a lottery of when they remortgaged as to how much pain they felt.
Car insurance – up 72%
“Drivers will have noticed their insurance costs have rocketed in the past five years. There was an immediate spike after Covid, as a shortage of parts made cars more valuable and parts more expensive. But myriad other reasons have contributed to motor insurance costs rising 72% across the past five years. An increase in car thefts is a more recent one, as well as repair costs being higher now cars have more advanced technology – the days are gone where replacing a broken wingmirror is a quick, cheap job.
“The good news is that car insurance costs have dropped back from their peaks, but the bad news is that recently they’ve been marching up again. It means there’s no sign of a drop in car insurance bills any time soon. Home insurance has also gone up, but there’s been a slightly more muted 12% jump for contents insurance.
TVs – down 30%
“There are some bright spots in the data, where prices have actually fallen in the past five years, but they are thin on the ground. The biggest faller in that time period is classified as ‘sound and vision equipment’ – simply put that means TVs and other electronics.
“Technology dominates the areas where we’ve seen prices fall, with computer costs having dropped 25% and mobile phones seeing a 5% fall in the inflation rate across the five years. The five-year figure hides some of the fluctuations in price though, as lots of electronics rose in price during and immediately after the pandemic – thanks to supply chain issues and more people wanting to buy TVs when they were stuck at home. But since then, some of the technology behind TVs and other electronics has improved and become cheaper to produce. There’s likely also a quirk in how the ONS figures are collected, as they try to normalise prices to factor in technological advances.”
