Families feel pinch as basic costs rise

By PAUL EASTON – The Dominion Post | Tuesday, 18 September 2007AdvertisementHouseholds are being squeezed by price increases on basic foods and petrol, even before higher power prices and a sliding Kiwi dollar begin to take effect.

Budgeting agencies fear the increase in staple food prices, including butter’s 23 per cent increase yesterday and milk’s increase by 12 per cent in two months, will bite into the average grocery bill.

The price increases come on the back of news that the Government’s planned carbon emissions trading scheme will push power and petrol prices up further.

It is expected that the price of power will increase at least 4 per cent.

World oil prices hit a record high of $US80 ($NZ112) a barrel last week and motorists were told to expect higher prices at the pump.

Homeowners are also facing increased mortgage payments, despite the Reserve Bank opting against lifting the official cash rate last week.

The jump in the price of butter came as Fonterra, which exports most of its milk, reacted to rising international prices.

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