'Real' inflation falls to minus 10pc

The real cost of living for British families has fallen by 10pc since this time last year, according to figures compiled for The Telegraph.

By Richard Evans
Published: 10:00AM BST 16 Jun 2009



While the official rate of inflation is now 2.2pc on the Government's preferred measure, the CPI, and minus 1.1pc on its old scale, the RPI, it has fallen deeply into negative territory on the most recent Real Cost of Living Index (RCLI), which stands at minus 10.3pc.

The dramatic fall in the cost of a typical family's weekly essentials has been driven by sharp declines in mortgage costs since last year, while petrol and diesel are also much cheaper than a year ago.

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According to the RCLI, the average weekly mortgage bill is now £178.56, a fall of £54.65 or 23pc from last year's £233.21. The price of unleaded petrol has fallen by 15.4p or 13pc from 116.9p a year ago to 101.5p, while the cost of diesel has declined even more steeply, falling by 26.2p or 20pc from 130.3p to 104.1p.

Overall, household costs, which cover utilities, council tax and insurance, are 17pc lower than a year ago, while transport costs have fallen by 16pc. These falls were partly offset by a 9pc rise in food prices, adding £2.94 to the cost of a typical basket of essentials, which now costs £35.20.

Some foods rose sharply in price – six tomatoes cost 38pc more than last year – while others fell; a whole cucumber is 16pc cheaper than a year ago.