The price of olive oil in the UK has more than doubled in the past five years, the largest increase among consumer goods, according to research from investment platform AJ Bell.
Olive oil has risen in price by 108% since July 2021, primarily due to crop failures and rising energy prices. Among goods and services, only mortgage rates have increased more significantly over this period – by 152%.
Consumer prices began to rise sharply in August 2021. Inflation was 3.2% that month, then accelerated to double-digit rates, peaking at 11.1% in October 2022, according to the Financial Times.
The rate of price growth subsequently slowed, but inflation remains above the Bank of England's 2% target—last month, it was 2.9%.
Cumulative inflation over the five-year period is 27.5%; if it were at the Bank of England's target, it would be 10.4%.
Meanwhile, the cost of a number of goods rose even faster.
In addition to olive oil, the most significant increases were seen in offal (+76%), beef and veal (+61%), eggs (+58%), and chocolate (+54%). This was driven, in part, by higher prices for fertilizers and feed. The price of pasta, milk, cheese, fast food, and bread increased by 30-49%.
Furthermore, some services have become significantly more expensive over the past five years. For example, car insurance has risen by 76% due to a combination of parts shortages caused by COVID-19, a rise in car thefts, and higher repair costs due to the spread of more advanced technology.
"Five years of compounded price increases have left an indelible mark on family budgets, from weekly shopping to energy bills, insurance, and veterinary care," notes Laura Suter, director of personal finance at AJ Bell.
Furthermore, one of the largest expenses for many people—the mortgage—is not even included in consumer inflation data. Average mortgage costs have increased by an "astonishing amount," she added.
Five years ago, borrowers could get mortgage rates below 1%, said Andrew Montlake, CEO of mortgage broker Coreco. Now, the best deals are above 4%, adding more than GBP 500 ($682 million) per month to the cost of a GBP300,000 mortgage. "This is an extremely severe financial shock," he noted.
The RPI index, which takes into account housing costs, has increased by 36% over five years. Nominal wages have risen by 29%.
According to AJ Bell, only 13 out of 192 goods and services have fallen in price since August 2021. The biggest price declines were recorded for audio and video equipment (-32%), personal computers (-20%), and information processing accessories (-19%).
