Rising costs could push household spend up £1,700 a year

New analysis by the Centre for Economics and Business Research (CEBR) suggests a typical UK family will spend £1,700 more per year on household costs in 2022.

The forecast for the BBC’s Panorama says a family of two adults and two children is set to spend £33.60 more per week compared with December 2020 due to inflation, with the report projecting that the inflation rate will rise to 4.6% by Christmas from the current 4.2%.

This rise is mainly due to higher fuel and energy prices.

Analysts say the full extent of rising costs is not yet being passed on to customers by supermarkets.

They say supermarkets are trying to keep prices constant over the festive period, even if this means absorbing some of the costs, because they don’t want to risk losing customers at their busiest time of the year.

The forecast is based on the prices of commonly bought items, including food and drink, clothing and household goods. It also includes spending on utility bills, such as fuel and power; transport costs; and money spent on recreation and days out.

It assumes that spending patterns will remain the same as in previous years and that inflation will remain at the projected 4.6% (up from the current 4.2%). However, experts expect it could rise higher in spring 2022, putting further pressure on household spending.

Compared with December 2020, the typical UK family of two adults and two children is predicted to spend £33.60 more per week, due to inflation, adding up to £1,700 per year.

The forecast is based on the prices of commonly bought items including food and drink, clothing and household goods. It also includes spending on utility bills, transport costs, and recreational activities.