Rising inflation is hurting the budgets of all those who are not seeing their income increase at the same speed, ITV News Consumer Editor Chris Choi reports
The cost of living in the UK has been rising sharply over the past few weeks as soaring energy and fuel prices has many feeling the pinch.Today official figures confirmed inflation - the rate of increase in prices for goods and services - has gone up by 4.2%, which is the highest it's been in ten years.
The Bank of England say it's set to carry on rising into next spring before falling back. And its expected that millions of households will see a significant rises in their cost of living and place serious strain on their budgets.Here are the five things to help explain why we're seeing this rise:
1. Second hand cars
Used car prices - up 4.6% in October and 27% since April - have continued to drive inflation higher too.
A global shortage of computer chips to make new cars, as well as other materials such as copper and aluminium, has led to fewer new vehicles rolling off production lines and therefore leaving more people wanting second hand vehicles.While supply has also been held back by a shortage of part-exchanges on new cars, fewer one-year-old cars on the market after sluggish sales last year and people extending leases to cope with the shortage of new cars on the market.
The AA has even said demand for some cars - like a Ford Fiesta or Mini Hatch is so strong that they are increasing in value with age.
2. Crisps and soft drinks
Food price inflation reached a 14-month high last month with the prices of favourite snacks, such as crisps and soft drinks rising the most, according market analyst Kantar.
It comes as the wider issues in supply chains in the UK and globally is pushing up prices across the board - with retailers having to offset higher costs of transport, fuel, energy, stock and wages which is being reflected in prices.
The prices of some crisps has gone up more than 7% compared with the same time last year. Earlier today newsagent chain McColl's Retail Group saw its shares plunge, as they struggle with supply chain problems.
3. Heating and fuel
As we head into winter, our heating bills rise. But in recent months gas and electricity prices have surged even higher -with bills increasing by at least £139 - a record high after the regulator Ofgem increased the energy price cap by 12%.
The reasons for the hike are down to a combination of a high demand in Asia, last year’s cold winter driving down European gas inventories, and a shortfall in wind-powered electricity supply. It's led to a number of energy suppliers going bust, with customers sometimes being moved to a different and more expensive supplier.
What does the Bank of England think about rising inflation and how does it plan to deal with it? ITV News Business Editor Joel Hills reports
Petrol prices were responsible for their share of inflation agony too. This time last year some areas of the UK faced restrictions on movement, so petrol prices were down at 113.2 pence per litre, but this October they hit 138.6 pence. It means filling up a 50-litre car now costs £12.70 more than this time last year.It's down to prices on forecourts getting higher last month, with fuel panic-buying amid supply disruption in late September and early October sending petrol and diesel spiking higher amid wider ongoing rises in the global cost of oil.
4. House prices
The average house price has hit a record high of £270,000 after surging by £28,000 over the past year, according to the Office for National Statistics.
Across the UK, property values increased by 11.8% over the year to September, accelerating from 10.2% annual growth in August.
Why? September was the final month buyers could pay reduced stamp duty on purchases in England and Northern Ireland which may have caused a scramble to complete deals. That may be combined with the demand for larger homes as some office workers spend more time working from home because of the pandemic.
5. Eating out
Customers are facing a rise in the cost of a meal out in a restaurant or pub as owners face rising gas and electricity bills, issues with supply chains and a rise in wholesaler costs.
Labour shortages of hospitality staff have also played a part in rising costs - down to a combination of Brexit policies and and the Covid pandemic.
Those who eat out are also facing higher menu prices after Government support to businesses during the pandemic - like reduced VAT for hospitality - ended.
So what can households do to try and balance the budget?
There's no way around it - households need to start thinking very carefully about their spending across the board to counter those price rises they cannot control such as energy and fuel. A quick look over the monthly bank statement should be a good start.
Always shop around and use comparison sites for phone, broadband and insurance rather than just rolling over into the next year to keep costs at a minimum.
Consider whether subscriptions are still useful and providing a good deal - many people signed up to new services like Spotify, Netflix or Sky during lockdown and may no longer use them as much.
Think about shopping for own-brand grocery products and set a strict, affordable supermarket budget. Supermarket loyalty schemes can help with making savings.
Cashback sites, and their welcome offers, can be another way of making household budgets stretch further.