What can households do to deal with rapid inflation?

Rising costs of living are pushing more and more households to the breaking point. Food and fuel prices rose, and inflation doubled his rate for the first time in 40 years.

Combined with spectacular gas and electricity price hikes, consumers are facing rising costs at every turn.

What lies ahead and what can be done to mitigate price increases, overcome the crisis and sustain household finances?

– Why is everything more expensive?

Covid-19 has caused global supply chains to stagnate as factories around the world face lockdowns and worker absences, combined with stagnant demand and delayed shipments. is taking a toll on This has increased the price of raw materials in particular.

Food prices are also rising with rising wages, including his HGV drivers due to recent labor shortages, with thousands of drivers Leaving the UK and returning to his EU home country.

As the impact of Russia's invasion of Ukraine and sanctions on President Vladimir Putin's regime unfolds, pressures on food and energy prices are mounting.

Gas and oil prices are heating up as supplies from Russia, one of the world's largest exporters of the energy sector, suddenly drop.

The United Nations Food and Agriculture Organization predicts that the conflict will increase global food prices by 8% to 22% in 2022.

– Will inflation remain high?

Inflation is still some distance away from peaking and is not expected to return to the 2% target by mid-2024.

The Bank of England recently predicted that inflation could peak at around 11% in October, but economists said it could rise as much as 15% in the worst case scenario. I made a prediction that says there is a

I mean High inflation continues to outpace wage growth, reducing the real value of income across the UK.

– Will my utility bills go up? from £1,971 to around £3,582 in October and could rise further to £4,266 early next year.

This projection is based on how much the average household spends on gas and electricity in her one year. Households that purchase more energy may see higher bills.

In general, there is widespread concern that an increase in Ofgem's price cap in October will cause many households to expand beyond it, but households It is encouraged to aim to build credit balances with suppliers in order to can afford to buy. The best option today is to insulate your home and make it as energy efficient as possible. The only real way to reduce energy costs is to use as little as possible in the first place.

– What about groceries? How can I reduce my grocery basket costs?

Prices for groceries and non-alcoholic beverages rose 12.7% in his year to July, the highest since August 2008.

Food prices rose 2.3% month-on-month in July, accelerating from previous gains in April, May and June. This is because cost pressures and the effects of the war in Ukraine have permeated supermarket shelves.

Customers save money on gas, says Kanter The number of times I go to the store is reduced because of it.

Consumers are advised to consider buying private label or expensive groceries and set a strict and affordable supermarket budget. Supermarket loyalty schemes can help you save money.

Cashback sites and their welcome offers are another way he can extend his household budget.

– Government assistance is coming.

His first installment of £326 was paid to low-income families last month as a stipend, followed by a second installment of £324 in the fall.

The Department of Labor and Pensions and her HM Revenue and Customs Department have identified those who are eligible for living expenses payments.

Many will receive their first installment in July, but for those on the tax credit, the first payment will begin in the fall of 2022 and the second in 2022. It will be held from the winter of the year.

Pensioner households will also receive an additional £300 for him to cover rising energy costs this winter and £150 for those on disability benefits in September. Receive an additional payment of £.

From October, household energy bills will also drop by £400, but politicians are under pressure to raise them.

People also earn We can see an increase in payment packets as the National Insurance (NI) starting threshold was raised from 6 July to £12,570 from £9,880. health and social care.

– What else can you do to avoid the pinch?

There is no way around this. Households need to carefully consider their spending across the board to combat uncontrollable price increases for things like energy and fuel.

A quick scan of your monthly bank statement is a good place to start.

Always research and use phone, broadband and insurance comparison sites instead of carrying over to the next year to minimize charges and insurance premiums.

Consider whether the subscription is still useful and offers good value. Many people signed up for new services like Spotify, Netflix, and Sky during lockdown and may use them less.

Government-sponsored MoneyHelper services have budget guides at www.moneyhelper.org.uk/en/everyday-money/budgeting