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| Households in England hit by inflation 'squeeze' | Households in England hit by inflation 'squeeze' |
| (about 1 hour later) | |
| People and businesses across England have revealed how their budgets have been squeezed by months of higher prices. | |
| The rate of Consumer Prices Index (CPI) inflation fell from 5% to 4.8% in November, but it remains well above the Bank of England's 2% target. | The rate of Consumer Prices Index (CPI) inflation fell from 5% to 4.8% in November, but it remains well above the Bank of England's 2% target. |
| And while food, petrol and energy bills climbed, gross annual earnings in England rose by 1.3%, the ONS said. | And while food, petrol and energy bills climbed, gross annual earnings in England rose by 1.3%, the ONS said. |
| The Bank of England expects inflation to "fall sharply" in 2012. | The Bank of England expects inflation to "fall sharply" in 2012. |
| The Office for National Statistics published its Annual Survey of Hours and Earnings (ASHE) in November, which showed a varied situation around England. | |
| Mandy and Dean Ashcroft, from Stourport-on-Severn, Worcestershire, are among tens of thousands of people feeling the pinch. | Mandy and Dean Ashcroft, from Stourport-on-Severn, Worcestershire, are among tens of thousands of people feeling the pinch. |
| They have taken a car off the road and installed an electric card meter to cut spending. | They have taken a car off the road and installed an electric card meter to cut spending. |
| Mr Ashcroft said: "What we save each month without insurance, tax or MOT all helps get us through." | Mr Ashcroft said: "What we save each month without insurance, tax or MOT all helps get us through." |
| Mr Ashcroft works at SDF Ltd, a foundry in Kidderminster, where he has not had a pay increase for four years. In that time, CPI inflation has risen from 2% to more than 5%. | Mr Ashcroft works at SDF Ltd, a foundry in Kidderminster, where he has not had a pay increase for four years. In that time, CPI inflation has risen from 2% to more than 5%. |
| CPI looks at the prices of hundreds of things we commonly spend money on, including bread and petrol. | |
| The Retail Price Index (RPI), which includes housing costs, fell to 5.3% from 5.6% in November, the Office for National Statistics (ONS) said. | |
| The Bank of England said last month large rises in energy and petrol prices had contributed significantly to inflation. | |
| "In particular, all six major domestic energy suppliers have announced substantial increases in their gas and electricity prices in recent months, averaging 18% and 11% respectively," its Inflation Report said. | "In particular, all six major domestic energy suppliers have announced substantial increases in their gas and electricity prices in recent months, averaging 18% and 11% respectively," its Inflation Report said. |
| Christmas dinners | Christmas dinners |
| The rise in energy bills has added £224 to the average household bill, official statistics show. | The rise in energy bills has added £224 to the average household bill, official statistics show. |
| Many firms have seen production costs rise as a result. Peter Parkes, managing director of SDF, said it had seen a 32% increase in energy bills. | Many firms have seen production costs rise as a result. Peter Parkes, managing director of SDF, said it had seen a 32% increase in energy bills. |
| "It's absolutely massive," he said. "It will affect our profit margins by the year end by £333,000 - it's that dramatic." | "It's absolutely massive," he said. "It will affect our profit margins by the year end by £333,000 - it's that dramatic." |
| Care home workers Kevin and Jo Gale, from Bridgwater, Somerset, said like thousands of other public sector workers, their pay had not gone up since 2009. | Care home workers Kevin and Jo Gale, from Bridgwater, Somerset, said like thousands of other public sector workers, their pay had not gone up since 2009. |
| Mr Gale said: "We've had a pay freeze for two years now, but effectively we've had our pay cut by 15%. That's what it feels like with all these bills going up." | Mr Gale said: "We've had a pay freeze for two years now, but effectively we've had our pay cut by 15%. That's what it feels like with all these bills going up." |
| In 2011, average wages in Sedgemoor, the district around the town, fell by 9.4%, according to the official analysis of all jobs, including part-time work. And across the South West wages remained flat. | |
| 'Sharp squeeze' | 'Sharp squeeze' |
| In Cornhill, Bridgwater's traditional market, butchers say shoppers have been changing their habits to adapt to rising food costs. | |
| Butcher Dave Gurini said: "We're selling loads more bangers, mince and cheap cuts." | Butcher Dave Gurini said: "We're selling loads more bangers, mince and cheap cuts." |
| An average Christmas dinner for six will cost £74 this year - £3.70 up from 2010, according to research by the University of Nottingham. | An average Christmas dinner for six will cost £74 this year - £3.70 up from 2010, according to research by the University of Nottingham. |
| Researchers said the two main factors driving food price inflation were high agricultural food prices and a low sterling exchange rate. | Researchers said the two main factors driving food price inflation were high agricultural food prices and a low sterling exchange rate. |
| However, Prof Wyn Morgan, from the university, said inflation had peaked and consumers should see a fall over the next 12 months. | However, Prof Wyn Morgan, from the university, said inflation had peaked and consumers should see a fall over the next 12 months. |
| "There seems to be some light at the end of the tunnel," he said. | "There seems to be some light at the end of the tunnel," he said. |
| It will be a welcome relief for people such as Yvonne Doyle, a working mother of three children from Plymouth. | |
| Mrs Doyle, a teacher who wrote to the BBC in 2008 to raise concerns about rising prices, said the situation had since worsened. | |
| She said: "Everything has gone up. I don't know how bigger families afford it. Pasta that was 59p is now over £1. | |
| "A packet of chocolate biscuits that was 60p or 70p is now £1.20 or £1.50. So 5% inflation? For me, I think it's doubled in two or three years - but my wage is the same." | |
| Delivering the quarterly report last month, the Governor of the Bank of England Sir Mervyn King said: "Looking ahead we can be reasonably confident that inflation will fall sharply at the start of next year as the contributions of VAT, energy and import prices decline. | Delivering the quarterly report last month, the Governor of the Bank of England Sir Mervyn King said: "Looking ahead we can be reasonably confident that inflation will fall sharply at the start of next year as the contributions of VAT, energy and import prices decline. |
| "The extent and the pace of the fall, however, remain uncertain. | "The extent and the pace of the fall, however, remain uncertain. |
| "Real take-home pay should gradually begin to recover after a period in which prices have grown faster than wages." | "Real take-home pay should gradually begin to recover after a period in which prices have grown faster than wages." |
| He added the "sharp squeeze" in real take-home pay had been "an unavoidable consequence" of world energy and other commodity prices, the need to balance the UK economy and the cost of the financial crisis in terms of productivity. | He added the "sharp squeeze" in real take-home pay had been "an unavoidable consequence" of world energy and other commodity prices, the need to balance the UK economy and the cost of the financial crisis in terms of productivity. |