RACHEL RICKARD STRAUS: Slow inflation by slashing broadband cost
One way to slow inflation: cut the cost of broadband – meanwhile, I’m switching to own-brand baked beans, says RACHEL RICKARD STRAUS
A can of Heinz Baked Beans costs £1.80?! How many?! While shopping at my local Co-op last week, I had to do a double take.
I love baked beans. (Ideally, poured over some potato waffles, with a little shredded cheese and lots of black pepper.) But they seem to have morphed from a cupboard staple into an expensive luxury in recent months.
Economic forecasters were caught out last week when the latest official figures showed that inflation is still rising. Most had predicted it would fall. But I’m sure many of us shoppers aren’t surprised in the slightest. Every week we see new price increases. Budgets are getting tighter.
Even worse, the latest round of price hikes aren’t on “nice-to-have” items. They are on the basic needs: food, drink, clothing, heating, council tax.
We cannot keep our costs low simply by controlling our expenses. Of course, we can buy cheaper groceries, turn down the heating and cut back on any remaining luxuries – if we haven’t already. But in the end, we still need to eat, stay warm, and pay our taxes.
Cost of staying in touch: Next month, the broadband and telecom giants are raising prices for millions of people – many by as much as 17 percent
So how do we deal with inflation?
Bank of England Governor Andrew Bailey shared his own controversial suggestion on Friday.
He begged pricing companies to think twice before going too steep.
“I would say to people setting prices – please understand that if we get inflation embedded then interest rates will have to rise further and higher inflation really doesn’t benefit anyone,” he said on BBC Radio 4’s Today programme.
His comments caused an uproar. Most companies are averse to passing on extra costs to their customers and tighten their margins before doing so. Many who raise prices do so just to stay afloat.
If some individual companies heed Bailey’s words, it might have a small impact on inflation.
But I know what would really make a difference.
Next month, the broadband and telecom giants are raising prices for millions of people – many by as much as 17 percent.
This will erode a large portion of most households’ budgets. Everyone from the wealthiest to the poorest will be affected as broadband and telephone access are now an essential part of everyday life.
The Mail on Sunday has called on these providers to contain their price increases above inflation in the middle of the contract.
We believe they are unfair to cash-strapped households who do not know when they sign a contract how much they will pay at the end of it.
Today we plead again. Not only would a little restraint help households. It would also support Bailey’s efforts to control inflation.
Price increases above inflation are baked into most contracts. BT, EE and Plusnet increase bills by 14.4 per cent, O2 and Virgin Mobile by 17.3 per cent on airtime, and TalkTalk and Virgin Media by 13.8 per cent on average. Then, next year around this time, they will increase again.
It’s time to stop this spiral.
In the meantime, I’m switching to own-brand baked beans. Any recommendations?
Award for Jeff Prestridge
Price man: Jeff Prestridge
Jeff Prestridge, Group Wealth and Personal Finance Editor, was lauded for his journalism at an awards ceremony in London last week, a mark of excellence in protection insurance.
The awards were organized by insurance broker LifeSearch.
Jeff won the Nick Crossman Award for Outstanding Contribution to Protection Journalism.
Lifesearch said, “Our industry needs brave journalism to shine a light when we do well, and challenge us when we don’t.”
Tom Baigrie, president of LifeSearch, said a “call from Jeff has left us still in fear of God.”
