Food price rise easing may not end debt problems

The debt problems faced by many consumers may not ease much despite a fall back in the extent to which food prices are rising.

In its latest survey…

The debt problems faced by many consumers may not ease much despite a fall back in the extent to which food prices are rising.

In its latest survey of shop price inflation, the British Retail Consortium (BRC) has indicated the overall increase in prices was 2.8 per cent in July, compared with 2.9 per cent in June.

This was entirely due to a drop in food price inflation from 5.7 per cent to 5.2 per cent, while non-food inflation stayed put at 1.3 per cent.

BRC director general Stephen Robertson explained: "Good crops of seasonal fresh fruit and vegetables boosting supplies and cheaper animal feed easing the pressure on meat prices were the prime reasons food inflation fell, offering some respite to squeezed household budgets."

He went on to note that many consumers have been changing their shopping habits in response to food inflation over recent months, such as by focusing more on special offers – which now account for 39 per cent of food sales.

However, this may not be enough to help those who are in very deep debt, as any increase in prices will make it harder for those already struggling to make ends meet while confronted with hefty interest payments.

In such circumstances, consumers may consider debt management plans or individual voluntary arrangements as ways of tackling the problem.

While food prices may not be rising as fast, it is still outstripping pay growth.

The most recent official employment figures indicated pay settlements have been running at 2.3 per cent including bonuses, or 2.1 per cent when these are not factored in.

By James Francis
 

Tell others:

shortlink