Inflation and the cost of living

Julia Ratcliffe, a Senior Analyst at The Reserve Bank explains what inflation is and how it can affect our every day lives.

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OK, where's my money going?

We experience inflation when we notice the price of things we buy going up. Inflation is currently (December 2022) sitting at 7.2%, but what does that mean to you? You may have noticed that your money doesn't go so far as it used to? You're not imagining it!

Since October 2021

• Grocery food prices increased by 9.7 percent
• Fruit and vegetable prices increased by 17 percent
• Restaurant meals and ready-to-eat food prices increased by 7.5 percent
• Meat, poultry, and fish prices increased by 10 percent
• Non-alcoholic beverage prices increased by 8.7 percent

And as if that wasn't enough, on top of that on 19 December 2022 the Westpac McDermott Miller Consumer Confidence Index announced:

"The past year has seen particularly large increases in housing costs (up 9 percent) and petrol prices (up 19 percent), while food price inflation hit a 14-year high of 11 percent in November.

"Those price increases are being felt by every family across the country. They’ve been particularly tough on those families on lower incomes, who tend to spend a larger share of their earnings on necessities."

What can I do about it?

Whilst that can feel a bit doom and gloom there are things that we can do to help reduce the impact of inflation on our pockets.

We LOVE this Newshub article where Kiwi shared their tips for managing costs whilst prices are going up. Take a read here and let us know what you think!

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