Over the last few weeks, Britain has been hit by rising fuel prices. Car owners are feeling the financial squeeze with prices reaching as high as £1.61 per litre across the country. However, running your car isn’t the only living cost that could be affected by rising fuel prices. Here’s how the rising costs of fuel may soon start affecting the cost of living in the UK.
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What living expenses could be affected by the rising cost of fuel?
In recent weeks, Brits have been astounded by sudden fuel price hikes. However, experts have warned that price increases may soon affect more than just running your car. As the price of fuel continues to rise, other industries will have to charge more for their goods. This could mean a significant surge in living expenses for UK households. Here are three things that could be affected.
1. Food bills
The food industry relies heavily on fuel to transport goods from location to location. Therefore, the rising costs of fuel will put a financial strain on distributors. As a result, food prices could soon go up!
Of course, any increases will be gradual, so there is no need to panic just yet! However, it may be worth familiarising yourself with cheaper alternatives to branded products or perhaps revisiting your budget to accommodate higher prices.
2. Transport costs
Unsurprisingly, the rising costs of fuel could make it more expensive for you to use public transport. Transport companies will have to pay more for the fuel that they use. As a result, ticket prices will increase to accommodate the higher costs and allow companies to continue operating.
Therefore, commuters and anyone who relies on public transport to get around may need to prepare for price hikes!
3. Clothing and consumer goods
Shopaholics may also be in for a shock as prices of imported goods are likely to increase. This means that clothing, tech and other imported items could soon become much more expensive.
For households that are already struggling to keep up with inflation, this could further tighten the financial squeeze! A good idea could be to buy from UK manufacturers as these companies will use less fuel than overseas suppliers. However, even UK-based manufacturers use lorries and vans to transport their goods so the price hike is likely to affect everyone.
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How to prepare for the rising cost of living
The cost of living has been on the rise for a while. However, increased fuel prices could boost the rate at which prices go up! Luckily, there are some ways that Brits can prepare for higher costs.
Boost your savings
The best way to keep up with inflation is to give your savings a boost. You can do this by investing in a high-rate savings account such as a cash ISA or a competitive easy-access savings account.
High-interest rates will lessen the impact of inflation, which will stop your money from losing as much of its value. Furthermore, having a strong savings account will stop you from spiralling into financial difficulty as prices continue to rise.
Adjust your budget
If you haven’t already, you may want to adjust your budget to accommodate rising fuel prices. This could mean giving yourself a little more to spend on food and transport each month. Planning ahead by adjusting your budget will prepare you for the rising costs of living and prevent you from spending more than you can afford.
Make the switch!
If your car is due for an upgrade, you may want to consider making the switch to an electric vehicle. Rising fuel costs are not being reflected by energy prices, which means that electric vehicles could now be cheaper to run.
As a result, households may be better off in the long run if they choose to switch to an electric car. To help you make the swap, the government is offering various grants to those who want to purchase an electric car. Therefore, now could be the perfect time to make the change.
The post Watch out! Rising fuel prices could soon affect the cost of living appeared first on The Motley Fool UK.
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