Annual retail inflation bills soar Published: 19/08/2008

The average Briton's annual retail inflation for goods and services could reach almost seven per cent, according to a new study.

Chelsea Building Society said that the spiralling costs of gas, electricity, rent, petrol and food bills could reach their highest level in more than 17 years, causing misery for millions of homeowners.

Rental payments, energy costs, food bills and petrol prices make up around 33 per cent of all individual expenditure.

Energy providers have already reported rises of 35 per cent for gas and 22 per cent for electricity by the time the year is through, while rental property payments could shoot up by nine per cent.

Price rises will hit pensioners extremely hard, with food and energy costs making up around 35 per cent of their total expenditure.

Darren Stevens, director of customer services at Chelsea Building Society, said: "The potential increase of real-time inflation to almost seven per cent will create a real strain for the average man and woman on the street. Recent fuel hikes, food increases and rental demands are forcing people to find further ways to afford life's essentials. Chelsea has also seen some evidence of people who are now dipping into their savings to pay for bills and unfortunately this looks set to continue.

"In tough times, it becomes even more important for people to manage their money effectively and adapt their savings habits. Reigning in unnecessary spending, considering each purchase carefully and adapting the amount you save each month can help save money to cover rising costs and still keep money aside for long-term plans."

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