Cost of living soars

Last Modified: 27 Mar 2008
By: Channel 4 News

As the number of mortgage approvals falls by a third in one year - consumers feel the pinch in the cost of living.

The number of mortgages approved for new house purchases has shrunk by almost a third since last February, according to new figures from the British Banker's Association.

Fewer than 44,000 new home loans were approved last month, as the credit crunch and the slowing housing market took their toll.

At the same time, people are repaying more than they are borrowing on credit cards. Spending was £7.3bn in Feb, and Repayments were £7.7bn. The difference is 0.4bn - double what it was last month. A sign, perhaps, that the credit card spending boom is slowing down.

But as spending slows, the cost of living is rising - putting even more financial pressure on some already stretched households.

The average family is earning more - but paying more - as figures show the cost of living has risen over the past year.

The findings show that households are typically seven pounds a week worse off because they're paying more for food, transport and fuel.

Feeling the pinch

Analysis for the Asda supermarket by the Centre for Economics and Business Research looked at the cost of individual items. It found:

Food and drinks have risen 5.6 per cent. Milk, cheese and eggs are up 17.6 per cent.
The cost of petrol rose 20.4 per cent and water supplies rose 6.2 per cent.
The government has announced the lowest council tax rises in a decade today - but at 4 per cent, they're still higher than inflation.
Despite rising costs of essential items, the headline inflation figure has been kept down by falls in less essential items - clothing fell 4.6 per cent and telecommunications fell 3.9 per cent.