- Written by Clodagh Rice
- BBC News NI Business Correspondent
The cost of living continued to put pressure on households and businesses throughout 2023, but are household financial conditions worse than they were this time last year?
BBC News NI looks back at a year of variable costs and high interest rates.
Back in January, households across Northern Ireland received a £600 utility bill payment directly to their post or bank account.
At the time, the inflation rate, which is the rate of increase in prices, was 10.1%. Meanwhile, interest rates, the Bank of England’s main tool to combat inflation, remained at 3.5%.
Chancellor Rishi Sunak had promised to halve inflation by the end of the year.
While this did happen, economists say it was mainly due to global factors, rather than measures taken by governments.
It is widely believed that interest rates have now peaked, and markets are betting that rates could be cut sooner than expected next year.
In order to compare this winter with last year, we took a closer look at household expenses such as food and utility costs.
food
Food prices on store shelves have been one of the biggest increases this year, with food price growth peaking at almost 20% in April.
At the time, Richard Ramsay, chief economist at Ulster Bank, said: “The rise in food costs we have seen in the last 12 months is on par with the rise we have seen in the last 12 years.”
Food wholesaler Harry Crawford said some produce was reaching prices he had never seen before.
“Everything comes into play: exchange rates, transportation, weather, availability, packaging input costs. Things will never go back to the way they were.”
energy
However, many households will not be able to benefit from price cuts this winter due to the low level of government support.
Even though gas and electricity prices are lower than last year, most households will actually end up paying more on their energy bills this winter than in 2022 as government support runs out .
Consumers Council’s Peter McClenaghan said: “Energy prices remain significantly higher than they were before the pandemic.”
“This winter is going to be tough for people, so it’s good news that prices are starting to come down, but we’re not out of the woods yet,” he added.
electricity
Power NI is Northern Ireland’s largest and only regulated electricity supplier.
A typical household’s bill last year, including government support from the Energy Price Guarantee, was £846.72, rising to £1,015.04 this year. This is an increase of 168.32 pounds, or about 20%.
oil
The majority of households in Northern Ireland (approximately two-thirds) use household kerosene.
The latest information from consumer council The price of 500 liters was £433.81 last December and will be £376.90 this December. This is 15% cheaper, saving you £65.91.
gas
This time last year, the typical household bill on SSE Airtricity, which provides housing in Greater Belfast, was £985.80 including EPG. It has now risen to £1,399.42. This is an increase of £413.62 or 41%.
For Firmus Gas customers in the Ten Towns area, the typical household annual bill including EPG has fallen from £1,743.32 last year to £1,363.32 this year. That’s £380 cheaper, a 21% reduction.
fuel
After Russia’s invasion of Ukraine, oil prices skyrocketed.
Petrol cost 139.6 pence per liter this year, down from 152.4 pence per liter in December last year, almost 13 pence per liter cheaper.
Diesel was 172.5p a liter in December last year and now costs 147.6p a liter. This is a price cut of almost 25p per litre.
What about the salary?
It depends on whether you work in the public or private sector.
Real wages are the value of wages adjusted for inflation and are an indicator of how living standards are changing.
In Northern Ireland, industrial action continues across the public service in protest at below-inflation pay settlements.
Official figures suggest private sector employees fared much better last year, with regular full-time wages increasing by 1.4% in real terms.
HMRC data shows that the steep inflation-related rises in cash wages seen in Northern Ireland over the past two years have now leveled off.
The standard monthly salary in Northern Ireland was £2,064 in November, up 2.3% for the year and down 1.8% month-on-month.
In contrast, typical wages across the UK rose 1.2% month-on-month in November.
This means Northern Ireland’s revenue was 11% lower than that of the UK, the largest difference ever.
Taking everything into account
Inflation has fallen significantly from its peak in 2022, but remains almost double the Bank of England’s 2% target.
As 2023 draws to a close, many households will not feel better off than last year, as food, utility and borrowing costs remain high.