Food Costs Predicted To Increase
Consumers are continuing to struggle under the burden of increasing food bills, it has been reported.
Pointing towards comments by industry experts, Gregory Pennington has claimed that recent surges in the price of food are the reason for the decision by the Bank of Englands monetary policy committee (MPC) to maintain the base rate of interest at 5.0 per cent earlier in August. This is the fifth consecutive month in which a hold was noted, however it was previously thought that the MPC was going to call for a reduction in order to help stabilise the economy.
The firms comments come after a recent report by the British Retail Consortium revealed that the cost of fresh produce rose by some 11.9 per cent in the 12 months leading up to August 2008.
And in facing higher food expenses and other rises in the cost of living, it may be possible that consumers find that their ability to manage financial commitments such as personal loans, credit and store cards, utility bills and mortgage repayments comes under strain.
Consequently a Gregory Pennington representative stated that it is important for people to continue to consider what essential demands their spending is under and to “budget accordingly”. Any money they have remaining, she stated, should be saved. This was deemed to be of particular importance as inflation and food costs are predicted to increase.
She said: “Since interest rates are expected to fall, inflation may well continue for some time, since there will be less incentive to save. The thinking behind it is that lower interest rates will kick-start the housing and credit markets, which some economists believe is the underlying cause of instability in the economy. Once that is rectified, inflation may begin to slow. But food prices are heavily affected by external factors, such as prices in the country of origin – so even if overall inflation begins to slow, we may see food prices continue to rise for some time yet.”
The spokesperson went on to claim that should food prices continue to increase then the amount of disposable income which people have left at the end of the month will continue to fall. However, the spokesperson pointed out that should consumers start to find their outgoings outweigh their incomings then they should seek help with their debts. One of the ways in which this could be done, it was stated, is to get a debt consolidation loan.
By applying for this kind of loan borrowers could find that they can merge numerous constraints on their finances into a single low-cost monthly repayment. This could see them generate more disposable income, money which could then be invested into a savings scheme. Getting a loan could also help those people who are looking to maintain a healthy lifestyle, after a recent PruHealth study showed that 22 per cent of consumers claim to be unable to eat well due to the high cost of nutritionally balanced foods.
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