Belfast Telegraph

This latest rise is yet another painful jolt for hard-pressed local families

By Claire McNeilly

It's all about disposable income.

You can talk about inflation, exchange rates and retail price indexes but what most of us really want to know is, how far will that shiny new-look pound in our pockets go?

The answer… not far enough. And now, another painful jolt as Power NI delivers a price increase north of 5% to over half a million Northern Ireland households, many of whom are already feeling the chill of impending poverty even before the first bite of winter.

The fact that our hike is less than those experienced by our neighbours in the Republic and the rest of the UK will be of little comfort.

Everyone knew, following last year’s historic Brexit vote, that the cost of living in Northern Ireland was bound to rise.

Those who voted for the UK to leave the EU  may well have had a utopian — or, rather, Norwegian —vision of an autonomous, wealthy future outside Europe and, eventually, we may get there.

But it’s a painful, uncertain road ahead and, at this particular milestone, wages are not keeping in tandem with inflation, which itself is running above target.

The housing market remains sluggish and the detested public sector pay cap — which affects over 30% of Northern Ireland’s workforce — has brought about, in effect, a pay cut for those people.

Not only that, but closer examination of the latest official figures show that they have in fact been hiding hefty increases in the cost of everyday items.

For instance, although the average rate of inflation in the United Kingdom has been 2.57% (between 2010 and 2016), the cost of fruit has risen by an average of 3.30%, chocolate and confectionery by 3.01% and alcohol and tobacco by 4.91%.

And, apart from electricity, both gas and transport costs also went up by more than the inflation rate.

Last week, this newspaper reported that the price of home heating oil is creeping up by the day, with consumers urged to stock up now to avoid seasonal hikes.

Petrol and diesel increased for the first time in three months in July after a late surge in the cost of oil.

Northern Ireland enjoyed the smallest price rise, however, and finished the month as the cheapest region, with unleaded at around 114p per litre.

There’s a little more cold comfort in the revelation that clothing and footwear went up just 0.57% a year on average, the cost of milk, cheese and eggs actually fell by 0.37% and new and second hand vehicles, toys, games and hobbies fell by one and 1.5% a year on average.

It doesn’t take a mathematics  genius, however, to work out that if your wages aren’t keeping up with inflation then you’re paying more for virtually everything that matters, which in turn means disposable income is down and levels of financial anxiety are up.

If you have less money in your pocket, you’ll spend it mostly on essentials — and that means inflation for lower income families is, effectively, higher than the so-called headline figure.

The bad news for the majority of us is that there’s precious little good news.

Belfast Telegraph