Serious Mortgages and 16 Olive Oils: How Much Have UK Prices Rised in the Last 2 Years? | UK cost of living crisis

Two years ago, a two-liter bottle of olive oil in the supermarket cost about $7. If you visit your local branch today, you could pay more than $16 for the same bottle. A bag of pasta or broccoli will set you back $95. % and 50% higher than in 2022, respectively. If your car insurance is due for renewal, an additional 35%-50%.

Russia's invasion of Ukraine almost 26 months ago set off a chain reaction that sent energy and food costs soaring, ultimately sending inflation soaring in the UK, reaching a peak of 11.1% in October 2022. This is the highest rate in 41 years.

On Wednesday, the Office for National Statistics releases inflation figures for March. Consumer price inflation is expected to continue to fall after February's 3.8% figure, but shoppers (and the Prime Minister) may have to wait another month to see a bigger fall.

Even though inflation has slowed, it has taken a huge toll on the budget. Analysis by the Observer found that UK households are now spending between 35% and 50% more on goods and services, from eggs and energy to mortgages and Marmite, than they did in April 2022.

grocery chart

It is not just the war in Ukraine that is to blame. Harvest shortages, exacerbated by climate change, have led to higher prices for some foods, while worker shortages and high labor costs have also driven up inflation. Supply issues partly caused by Brexit haven't helped, and the infamous Liz Truss budget has thrown the mortgage market into chaos.

Will the end be in sight on Wednesday? Last week, the Organization for Economic Cooperation and Development (OECD) said food inflation in its 38 member countries fell for the 15th straight month, from 6.3% in January to 5.3% in February.

Tesco chief executive Ken Murphy said last week that inflationary pressures had eased significantly. But he warned that prices for some key raw materials, including cocoa, coffee, potatoes and crude oil, continue to soar.

As items become more expensive, they rarely become cheaper. Even if inflation falls to zero, olive oil is unlikely to return to $6 a bottle. Virgin Media probably won't cut its broadband rates and no one expects Pret to cut the price of coffee.

So what has the last two years really done to our finances?

Energy costs: 54% increase Photo: Chunyip Wong/Getty Images

Before the war in Ukraine, the average gas and electricity bill was about $1,100 a year, but two months after the Russian invasion, regulator Ofgem raised energy price caps by 54%, adding another $700 to the average bill.

Falling wholesale prices led Ofgem to lower price caps, and the new caps on April 1 saw the average household paying by direct debit see their bills fall by 12%, from 1,928 to 1,690 per year.

So after two turbulent years, bills are on average about 590, or 54%, higher than they were in March 2022. For some, the recent drop won't be enough. In January, Citizens Advice warned that 5.3 million people now live in households in the United States. Debt to your home energy supplier.

Broadband and mobile phones: up 23% Photo: Getty Images

About 11 million broadband customers and 36 million mobile customers have contracts that include price increases in line with inflation, according to regulator Ofcom.

When inflation peaked last April, some broadband and mobile customers' bills rose by a further 8.8% this month, up 17.9%. On average, bills have increased by 23% over the past two years.

Households with broadband and mobile contracts costing $334 a year in 2022 (the average according to comparison site uSwitch) are now paying an extra $77 a year for their broadband connection, assuming they don't switch providers. Broadband customers can save an average of $179 per year by switching service providers. Mobile customers can save $321 a year by switching to a SIM-only contract at the end of their 24-month mobile phone contract, says Richard Neudegg, head of regulatory at Uswitch.com.

A person with a typical $35 monthly cell phone and data mobile plan has seen their annual mobile bill increase by $97 over the past two years.

Food Photo: Murdo MacLeod/Observer

Olive oil has seen the most notable price increases over the past two years. ONS figures show the average bottle has increased by 89%.

This isn't the only product affected. Broccoli is now 50% more expensive than two years ago (up from 1.66 to 2.52 per kilo), while cucumbers are up 39p. Cheese, grits, and baked beans were all topped up. The price of a branded tin is 1.04p in February 2024 compared to 76p in April 2022. One of the biggest drivers of food inflation has been budget constraints. A 500g bag of basic pasta cost 50p two years ago. It's 95p now.

The reasons for the increase are varied. Alex Lawrence, of consumer action firm Circana, said frozen foods had been affected because they were overly reliant on energy through their manufacturing and distribution.

Two years ago, a pack of four frozen beef burgers cost 2.43. Today you will get back 3.59, a 50% increase. It was a similar story for oven chips, with prices rising by 46%.

Olive groves across Europe were hit by the hottest summer on record last year, including wildfires. Spain, the world's largest olive oil producer, has placed security tags on supermarket bottles to tackle a surge in theft by criminal gangs. Chocolate has also been affected by the climate crisis, with cocoa market prices currently 132% higher than in March 2022.

Hit by avian flu and energy costs, eggs increased by 37% from 2.40 in April 2022 to 3.30 in February 2024.

Restaurant prices have taken a hit due to the cost and difficulty of hiring staff. The main course increased by 17% from 13:19 in April 2022 to 15:38 in February 2022. Takeaways increased further, with fish and chips rising from 7.90 to 9.66 in 2022.

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Drinking takeaway coffee every day is becoming more and more difficult to handle. A 12-ounce regular latte from Pret was 2.95 in 2022, but now it's 3.50. A cappuccino from Danish chain Joe & the Juice currently costs 4.30.

House photo: Jill Mead/Observer

Households trying to settle their monthly mortgage bills typically face payments that are 35%, or $4,700, higher per year than those who took the plunge in early April 2022.

The mortgage market has been on a rollercoaster ride since the disastrous small budget in September 2022 saw many new fixed rate deals rise above 6%. It plummeted earlier this year, but later began to rise again.

mortgage chart

The average for a new two-year fixed-rate mortgage in April 2022 was 2.86%, according to Moneyfacts, but the equivalent figure earlier this month was 5.8%.

For example, if someone takes out a $237,000, 25-year mortgage, at a 2.86% interest rate in April 2022, the borrower's monthly payment will be $1,107. The figure for borrowers paying 5.8% in April 2024 would rise by 35% to 1,499.

For a five-year revision, the typical increase is nearly 28%.

Average private rents in the UK have hit a record high as demand significantly outstrips supply, but the situation has worsened as landlords using mortgages seek to pass on sharp interest rate increases.

Typical advertised private rents outside London for properties coming to market have increased by 17.6% since the end of March 2022, from 1,088 to 1,280, according to the most recent figures from property website Rightmove. Typical rents in the capital increased by 20% over the same period, from 2,193 to 2,631.

Car Insurance Photo: Getty Images

The massive rise in car insurance premiums has been one of the biggest hits to household incomes over the past two years, with premiums doubling in many cases to more than $1,000 a year.

The average driver's insurance premium at the start of 2022 was $414, according to the Association of British Insurers. By the end of 2023, this amount had increased by 51% to $627.

Admiral, one of the UK's largest insurers, recently announced it was increasing its premiums by 35% in 2023 alone. The Office for National Statistics says prices have risen 47% in the past 12 months.

Julie Daniels, an auto insurance expert at Compare the Market, said young drivers had seen the steepest increase. average [quoted] Insurance premiums for drivers under 25 have increased 915 points over the past 24 months, reaching $2,077. Previously high rates of inflation have probably affected several areas of the motor repair industry, including the cost of spare parts, energy costs and the cost of hiring professional mechanics.

Train fares Photo: Richard Saker/the Observer

Train tickets in England and Wales rose by 5.9% in March 2023 and by 4.9% in March this year, showing annual increases in both years.

This represents an 11.1% increase in annual season tickets from Woking to London, from 3,664 to 4,072.

A typical rail user buying an annual season ticket between Liverpool and Manchester would see the cost increase from 2,864 to 3,180 with the 316 added.

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