My own cost of living index? The £4 doughnut

Daniel Hambury
Melanie McDonagh24 January 2022
WEST END FINAL

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You want to know when the cost of living crisis really comes home? It’s when you pay four quid for a doughnut.

Let me be clear. This is not any old doughnut. This is a Bread Ahead doughnut, with filling options which include best raspberry jam, chocolate custard and vanilla. This is not a Krispy Kreme. So, I didn’t expect it to be cheap. But four quid? “Really?”, I said faintly. “How many do you get”. “That’s for one”, said the assistant. My daughter, blushing, tried to pull me out of the shop.

This, I may say, was a year ago. And it was at that point it came home to me that my personal inflation index had gone through the roof.

Because we all have our own personal take on inflation, our own measures of the extent to which the cost of living is rising more than we can afford. Today, for instance, I learn that the price of wine and champagne could go up by a fifth this year. This is something I can get my head around. The minimum price for a vaguely drinkable bottle of wine — given that so much of the price is attributable to tax — in my mind hovers around seven quid or a tenner for Riesling. So, if it goes up by a fifth, that’s around £1.40 to £2 extra. As for champagne, that will be a fifth on £20 for a drinkable bottle. That, my fellow drinkers, is quite a lot.

The Office for National Statistics goes to a great deal of trouble to get inflation statistics right. It collects 180,000 prices on 720 consumer goods (250 price quotes for each item) at 140 outlets around the country with other sources for housing and fuel. Thus, while inflation was 5.5 per cent last year, petrol was up 27.8 per cent and electricity 18.8 per cent. So the overall average masks far greater individual rises.

It turns out that economy items have risen proportionately far more than average. A price rise for an economy loaf from, say, 40p to 50p is big in percentage terms. The worrying thing for the Government is that we’re all feeling poorer — the budget brand buyers and the fortified wine brigade. Energy bills we all have in common: the last utility bill I paid was £350. That struck me as huge. And yes, energy bills are to go up by a fifth more this year. So, it’s not just the price of Rioja.

The last Prime Minister who took inflation seriously was John Major because he grew up in a poor family and remembered how his mother had to struggle to make ends meet. I’m not sure our political classes really do take inflation seriously enough. But they’ll have to now.

Oh, the doughnut? Reader, I bought it.

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