For the ninth consecutive month, it is the 50-64 year olds who are facing the highest rate of inflation, at 4.5 per cent according to the latest figures from the Alliance Trust Research Centre. This is 41 per cent higher than the official headline rate of 3.2 per cent
This month's official inflation report showed that the official headline rate of inflation fell from 3.4 per cent to 3.2 per cent in June, continuing the declining trend that commenced in May.
However, Alliance Trust's monthly study of inflation rates facing different age groups reveals the over 75 year old age group actually saw a sharp increase in inflation, from 3.3 per cent to 3.6 per cent, driven largely by higher food price inflation.
For the ninth consecutive month, it is the 50-64 year olds who face the highest rate of inflation, at 4.5 per cent, while the over 75s face the lowest rate, at 3.6 per cent.
The 50-64 year old age group is facing a rate of inflation that is 41 per cent higher than the official rate, largely due to the fact that this group spends relatively more of their disposable income on transport, where inflation remains relatively high, at close to 9 per cent.
In particular, fuel price inflation is currently at a level of 16 per cent. In contrast, the over 75s continue to face the lowest rate of inflation, at 3.6 per cent, helped by the fact that this group spends relatively more of their budget on utilities, where prices are now 2.5 per cent lower than at this time last year.
Utility price inflation remains negative this month, at minus 2.5 per cent, as electricity and gas prices have fallen over the last year; by almost one per cent and six per cent respectively. This helps the over 75 year olds in particular, as this age group spends the highest proportion of their budget on utilities.
The over 75s spend almost eight per cent of their budget on
electricity and
gas bills; compared to just four per cent in the case of the under 30 year olds.
However, the elderly also spend a relatively higher percentage of their budget on food, at 17 per cent, compared with less than 10 per cent in the case of the under 30s. The current increase in food price inflation is therefore having the biggest impact on the over 75s.
"Overall Inflationary trends have continued to ease this month, helped by less upward pressure on fuel prices and ongoing price deflation in both clothing and audio-visual goods,” said Shona Dobbie, Head of the Alliance Trust Research Centre.
“This has helped to stabilise, and even ease, the inflation rates facing most of the age groups included in our study.
“However, food price inflation has started to increase once more, as have the costs of some household services, contributing to this month's increase in the inflation rate facing the over 75s. Although this age group currently faces the lowest rate of inflation, this may begin to trend higher over the next few months.
“Currently, it is the two working age groups who face the highest rates of inflation, largely due to the fact that transport price inflation remains high, at close to nine per cent. But, now that petrol price inflation is easing, we may see the inflation rate facing these age groups continue to decline over the next few months."
|
Age Group
|
Inflation Rate
|
|
Under 30
|
4.1 per cent
|
|
30-49 Year Olds
|
4.3 per cent
|
|
50-64 Year Olds
|
4.5 per cent
|
|
65-74 Year Olds
|
4.0 per cent
|
|
75 and Over
|
3.6 per cent
|
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