Throughout 2023, Northern Ireland’s households and businesses remained under pressure from the cost of living. While interest rates were hiked up to 15-year highs, households were left to manage fluctuating costs. In January, the inflation rate was 10.1%, and households received £600 energy payments to help with energy bills.
Prime Minister Rishi Sunak had pledged to halve the rate of inflation by the end of the year, but it’s argued that this was largely due to global factors rather than government action. Interest rates are expected to have peaked, and the markets anticipate a cut-in-rate sooner than expected in 2024.
BBC News NI has compared household bills between this winter and last year, including food, energy, electricity, oil, and fuel. Food prices had the most significant increase in 2023, peaking at almost 20% in April. Although Ulster Bank’s Chief Economist Richard Ramsey believes that prices will never return to their pre-inflation rate status, food wholesalers argue that prices are mostly due to exchange rates, transport, weather, availability, and input costs.
Gas and electricity prices are lower this year than they were last year, but most households will pay more for energy this winter than in 2022 because the government support is no longer in place. Energy prices are still higher than they were before the pandemic.
In terms of fuel, petrol was 13p per litre cheaper this year, and diesel was 25p per litre cheaper than last year. There remains ongoing industrial action across public services in Northern Ireland against below-inflation pay settlements, and typical full-time pay increased by 1.4% in real terms in the private sector.
While inflation is down from its peak in 2022, it is still almost double the Bank of England’s target of 2%. As 2023 ends, many households still face high borrowing costs. Overall, while there have been fluctuations, households are not better off compared to last year.
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