Prices are going up - fight back!

Inflation has been running at 3% or more for the whole year. Food prices are going up even faster than this, while the prices of other products are likely to follow. Here are some tips on how to fight back against the surge in prices.

The figures make grim reading. Prices in our shops shot up by 2.2% over the course of October alone, their highest increase since January. Food price inflation was even higher, with prices rising by 4.4% over the 31 days to month end.

Why are prices going up? Retailers aren't simply being greedy. Trade prices have surged in the last year, with essential materials like cotton (up 90%) and wheat (up 47%) leading the charge.

Prices are also rising because of increasing demand for certain types of products in the emerging markets of Asia. Meat is a good example of this. Meat prices are up 16% this year, according to the Food and Agriculture Organization of the United Nations. That’s the largest increase in two decades.

What’s worse, you shouldn’t expect these prices to go down any time soon. The Bank of England’s quarterly inflation report on Wednesday suggested that inflation would remain high for the next year. So what can steps can we take to avoid the worst of these increases?

Cut your food bill

Food is the area that is seeing the largest increases, so this should be your starting point for cutting costs, even if the money involved seems relatively short change at first.

There are some obvious steps that you can take to cut your food bills, like going to supermarkets with generally cheaper prices or cutting down on organic food, which tends to cost more.

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If that doesn’t suit you, then try to keep an eye out for individual products that are rising in price. For instance, meat-eaters might have noticed that the price of lamb and beef steaks have shot up in the last year or so. Opting for cheaper kinds/cuts of meat – like chicken or minced beef – could save you a great deal.

It’s also worth looking out for fresh turkey. According to mysupermarket, its price has gone down (yes, down!) by 13.5% since 2007.

Clearance food

Check out websites where you can buy out-of-date/clearance food for knock-down prices. Huge amounts of food go to waste in the UK every year, and this is your chance to put some of it to good use.

Approved Food does a wide range of groceries, health & beauty products, pet and household products. Food Bargains is another provider of clearance food, and it has a full money back guarantee on any product that you are not happy with.

These websites can deliver worthwhile cost savings, as long as you are looking to buy predominantly dry foods (nothing frozen or chilled) in bulk.

Take crisps as an example. At Approved food, you can get a McCoys Classic 9 pack (with 9 crisp packets inside) for 99p, instead of the usual £1.49. Over at Food Bargains, you can get Kettle Chips Sour Cream & Onion (150g) for 39p, a saving of £1.40.

Just bear in mind that it's better to buy in bulk due to the delivery charges - Approved Food charges £5.25 to deliver a 29kg box to your home, while Food Bargains charges £4.99 for boxes up to 29kg.

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Doubtful that out-of-date food will taste very nice? Firstly, be clear that with Approved Foods, all the products are after their “Best Before” date, but BEFORE their “use by” date. We worried about the quality of these products too, until earlier this year we did our own taste test, and found that most people didn’t notice a difference in taste between the clearance and non-clearance food.

If you are still worried about it, then you can pick products that are still in date on Approved Foods, although be aware that many of these are short dated.

Other options for food savings? Growing your own food in the garden is the cheapest option of all, as long as you’re prepared for the hard graft of growing your own courgettes and spinach. Picking food at pick-your-own farms is another relatively cheap option. See pick-your-own.info for maps and advice on farms around the country where you can pick food.

You normally have to pay by the weight, but it’s generally very affordable, especially given that you might be picking large amounts of berries that are very expensive in the shops.

A clothes price rise may be on the horizon

Cotton prices have almost doubled in the last year, so in a way it’s surprising that clothes prices haven’t increased markedly over the same period.

Clothes retailing is an incredibly competitive business, and it seems that retailers have been absorbing higher cotton costs without taking the risk of losing customers by increasing prices. Still, we have no guarantee that this state of affairs will continue indefinitely.

Savings accounts

Anyone with a savings account will be aware that interest rates on these accounts are generally much lower than the rate of inflation, which means that the value of your savings is being gradually eroded.

As we explained in Scary truth about our substandard pensions, this erosion in the value of savings hits older people the hardest.

To get the best deal, you need to shop around for savings accounts in order to find any that beat the 3% inflation rate, or at least which minimise your losses.

In terms of easy access accounts, the Nationwide MySave Online Plus is the best option, with a gross interest rate of 2.99%.

An even better option would be ISAs, either in the form of cash or shares, as you earn interest tax-free and thus can get a much better net return on your money.

Tell us your tips for fighting back against the price rises

Have you seen any scandalous price hikes around at the moment? What are the best ways to avoid them? Let us know your thoughts using the comments box below!

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