Inflation has been wreaking havoc with household finances and this is most evident in the cost of food and in travel expenses. In the month of July, Asda Income Tracker indicated that families in the UK had significantly less to spend than in the same period last year.
Their findings showed that families averaged £166 to spend this year in July which was down from 6.4% last July. The actual figure is £11 shorter on money to spend for food and transport than they had been a year ago. Much of this increase was due to the dramatic inflation in the cost of travel that is reported as being as much as 16.5% higher this year than last year.
Then the survey indicated that the cost of food was only up a bit but enough to put the squeeze on already stretched budgets across the UK. According to a report in the Guardian, this will put pressure on Chancellor Osborne who is also being pressured by many of his own MPs to do something for the economy, to boost growth. The shadow chancellor believes that Mr. Osborne should act quickly if he is to stimulate an economy that has remained virtually stagnant for the better part of a year.
There are soon to be a host of other surveys which will indicate the state of the manufacturing and construction industries whilst other data will most likely indicate that small businesses are hard hit and struggling to persuade financial institutions to invest with cash that is greatly needed to grow their firms.
Unfortunately, the end of pressure caused by inflation is nowhere in sight and it is believed that the upcoming hikes in rail fares will cause further problems. The 8% January increase may put some household budgets over the edge. These are just some of the issues confronting government as they work to ease a struggling economy.
