Inflation: These three things have gone up in price

With the Consumer Price Index edging towards double digits, these are the latest things to increase in price.

Last week, the Consumer Price Index (CPI) increased to 9%, the highest inflation has been in 40 years.

Much of this can be owed to increased energy prices, with the Ofgem energy price cap coming into effect last month, according to the Office for National Statistics (ONS).

However, these are not the only items in the ONS’s “basket of goods” to increase in price. Here are three other things to have risen in price. 

The ONS has attributed the rise in second-hand car prices to a global semiconductor chip shortage.

According to JP Morgan, an American bank which British consumers may know as Chase, this global chip shortage is due to the COVID-19 pandemic. In simple terms, semiconductor chips are also used in modern computers, and with more people working from home and fewer in the factories, this in part created strong demand and limited supply.

Now, semiconductor chips are also used in the production of new cars. But, with limited supply, it means new cars are not made at a pace to satisfy demand. As a result, many British consumers have opted to shop around for second-hand cars, which has created further demand and therefore higher prices in this sector.

The cost of eating out has also got more expensive over the past year.

According to the ONS, prices for restaurants and hotels rose by 1.7% between March and April this year, a 1% increase from the same figure last year.

However, it is the rise in prices in restaurants and cafes which is particular to note. During the pandemic, Value Added Tax (VAT) was reduced to 12.5% for restaurants and cafes.

This has risen to 20% once again from 1 April, which has ultimately filtered through to the bills customers have received at their tables.

According to the ONS, prices in restaurants and cafes have grown by 8.4% between April 2020 and last month.

Over the past year, prices for furniture, household equipment and maintenance rose by 10.7%.

As a steadily climbing sector, much of this increase can be owed to a rise in raw materials.

According to research from the British Furniture Manufacturers Association, furniture makers have seen an average rise of 18% in raw materials across the sector.

In addition to this, 96% of those who they surveyed have raised prices on their products since October.

While consumer spending has remained at a similar level for March, the number of transactions across the UK have declined, according to Nationwide BS’s latest Spending Report.

“We’ve seen a drop in the number of transactions made by members during the month. However, with spend remaining at the same level, it is a clear sign of rising costs for good and services – both those that we need and those that we want,” said Mark Nalder, Head of Payments at Nationwide BS.

Of the transactions classified as “essential spending”, the cost of utilities and bills recorded the highest month-on-month rise of 40%. This is largely due to the increases in Council Tax which were put on ice at the end of the previous tax year.

As for transactions on “non-essential spending”, almost £490 million was spent on “eating and drinking”, a category which includes spending in pubs and restaurants.

“As we head into the summer months, it will be interesting to see how people balance the need to save money with the want to enjoy their life with family and friends, especially with the upcoming Queen’s Platinum Jubilee Bank Holiday weekend,” said Nalder.

Nationwide BS’s research was gathered from 212 million transactions by Nationwide members.