‘Me’flation: Watch out for these rising prices

The Bank of England announced that prices rose by 2.8% in the past year to the end of April as measured by the consumer price index, which was down from the 3.3% increase to the end of March. But that might not line up with how inflation has felt for you in the past year, and there’s a good chance your instincts are right.

Inflation readings encapsulate a lot of different things: food prices, service, clothes, energy and more. But depending on where you live and your day-to-day habits, that picture might look very different for you. This is why some economists have started using the term ‘me’flation, to look at what the national numbers will really mean for you.

Costs, like petrol, are difficult to hide from consumers but other price increases have been sneakier. For example, lessening portion sizes instead of prices or slowly increasing costs over time. Here are some of the areas where your bills may be seeing their biggest rise.

Taking a trip

Those with holiday plans could be in for an expensive summer as the cost of hotels and restaurants rose 4.4% in the past year. Of course, if you’re travelling abroad you will see a different picture depending on where you’re headed, but it’s worth factoring in if you were planning on a staycation to save a few pounds this year.

Interestingly, planning in advance isn’t necessarily the solution to spending less in this case. Data from travel booking website Kayak shows that the best time to book a stay is the week of your holiday, and saves on average 26% on domestic stays and 27% internationally. This isn’t always practical for travel purposes, but it is a nice win for those that might have been procrastinating.

The inflation reading for April is also not yet fully factoring in the rising cost of flights since the US-Iran war began. While the numbers are showing a decrease, it’s likely that you are seeing much higher prices in your search. This could be a case where an advanced booking helps more than it hurts.

Sweet treats

We are having to spend more to satisfy our sweet cravings this year, as the price of confectionaries rose by 9.7%. Unfortunately for the chocolate lovers, cocoa is the main cause due to a lack of supply.

Sweets can be a hard area in which to save, because the best things for our cravings don’t always line up with our wallet. Buying sweets in bulk is often more affordable, but harder to portion out. One option could be to shop around for a store brand that is a bit more affordable, but meets the taste criteria of old favourites. Packaging can be a large part of these costs, especially when it comes to holidays, so simpler can mean savings.

Getting in your protein

Beef and fish have both risen in cost this year, by 13.2% and 11.6% respectively. This can be a hard area to save without sacrificing on quality, so many people have opted for cutting back to a few nights a week instead.

Another option that could help you save, depending on the area, is taking a visit to the local butcher. While this might seem more expensive on the outset, butchers tend to offer alternative cuts of meat that are better value, and often provide better quality meat with less water, so that when cooked, there’s more bang for your buck.

Keeping the lights on

One area you hopefully haven’t seen prices rise yet is your energy bill. The price cap on energy put in place by the energy regulator OFGEM will remain in place until the end of June, giving a bit more time at the current rate.

However, prices are then estimated to rise by around 13% or £209 to £1,850 a year. One of the easiest ways to keep your bill at bay is by installing a smart meter, which will provide you with accurate readings to send on to your provider, as well as help you identify the areas where you’re spending the most energy.

The good news is this month’s inflation reading was below what analysts expected. It’s hard to say if that pattern will continue, but it’s a good reminder that inflation isn’t very easy to predict. But for now, it seems we have some way to go before hitting the Bank of England’s 2% inflation target.