Fuel and food prices soar in aftermath of Brexit vote
Northern Ireland consumers are being warned to brace themselves for an unhappy new year as rocketing fuel and food prices take their toll.
Motorists will start to feel the squeeze in the first few weeks of 2017 as petrol prices shoot up to a staggering £1.25 a litre - up 25% on the same time last year.
This follows news that the cost of basic goods such as coffee and chocolate could increase by as much as 15% in stores across the UK - another aftershock from the Brexit vote last year.
And retail giant Next has admitted that this year will be "challenging" as rising inflation erodes earnings growth and squeezes consumer spending.
Economics expert John Simpson said the UK's imminent departure from the EU must take most of the blame. "A depreciated value of sterling by between 10% and 15% was always going to be bad news," he said.
"Imported essentials are now causing consumer pain. Motoring costs are on the rise - but not only motoring. A big proportion of imported foods are from warmer climates and they arrive in the UK priced in currencies other than sterling. Now we are being asked to pay more."
He added: "All that points to a winter, spring and summer of discontent. And when inflation starts, it spreads."
Drivers are currently being hit with the most expensive petrol prices in more than two years. A litre of petrol reached an average of £1.17 in the UK on Monday, government figures show.
This is higher than at any point since December 2014.
Diesel is now at £1.20 a litre, a price last seen in July 2015.
At the beginning of 2016 petrol was £1.02 and diesel was £1.06. This time last year the price of crude was falling sharply. But on Tuesday, the first trading day of 2017, oil prices hit an 18-month high.
Meanwhile, a slide in the pound in the aftermath of the Brexit vote has pushed up the cost of imports and has already been blamed by some retailers for increased prices in the UK.
It is understood Marks & Spencer reached an agreement with its suppliers over Christmas to price rises of up to 15%, triggering fears of higher prices on the shelves. One unnamed supplier told the Sunday Times that consumers could soon expect shelf prices for chocolate, confectionery, nuts, tea and coffee to rise by 8% to 10%.
A spokesman for M&S said its position on not passing on price rises to customers had not changed since November. He added: "We never comment on commercial discussions with suppliers. We remain committed to competitive prices."
Since the Brexit vote, the pound has fallen 14% against the dollar and 11% against the euro - a fall that prompted food and household goods supplier Unilever to charge an extra 10% for some of its products last year.
Tea drinkers won't escape the rising costs this year either for the first time in a decade, due to the falling value of the pound and cost pressures on tea growers in Asia and Africa.
Already, the makers of Yorkshire Tea have increased the pre-printed price on packs of 40 teabags supplied to convenience stores by 7% from £1.39 to £1.49 and Tetley has said discussions are "ongoing" with retailers about a price review.
UK Tea and Infusions Association chief Bill Gorman said the price of tea hasn't risen for 10 years due to major retailers working on extremely small margins and because of market oversupply.
"Because the international tea market is in US dollars, you are now having to pay 10% to 15% more as a result of the lower value of sterling," he said. "Tea is great value costing two to three pence per cup, compared to coffee, which is 9p per serving."