AT this time of year, millions of people across the country are waiting with anticipation – or trepidation – to see what impact their annual pay review will have on them.
An employee on the average Edinburgh salary of around £30,000 may expect to
see something in the region of £85 added to their monthly wage, based on last year's average earnings rise. And even that figure may be optimistic this year given the current economic climate.
But, whatever your pay award turns out to be, give it a month or so and you'll probably find that the extra cash hasn't helped loosen the purse strings much, if at all.
Official government figures show inflation is running at a modest 2.5 per cent, but – as anyone who has done a supermarket shop in recent months will know – the cost of many of the most common household commodities are rising much faster.
While one year ago you would expect change from £1 for a standard loaf of brand-name bread, that's no longer the case. The average cost of that loaf has soared by more than a quarter in the last nine months alone.
The same has happened to butter, eggs, flour and, to a slightly lesser extent, milk and cheese.
And it's not just rising food costs that have hit consumers in the pocket. Much has been said about the widespread effect of rising costs of petrol, with a litre of diesel now setting the motorist back 109.4p, compared to 92.3p last year.
Not only do those increases affect motorists, they also feed price increases across the board by pushing up the cost of transport, as well as bumping up fares on planes, trains and your local Lothian bus.
Consumer groups have long argued that customers are being hit in the pocket at the same time as supermarket giants like Tesco and Asda Walmart are making giant profits.
But the Scottish Retail Consortium is adamant there is little retailers, whether small firms or supermarket giants, can do about the rising costs they are having to foot.
And the fact supermarket profits have slowed significantly in recent months seems to add weight to that stance.
Fiona Moriarty, director of the SRC, said: "These price pressures are completely out of the control of retailers. The decision they have to make is whether to pass on the costs and what percentage to pass on. But up until now they have not been passed on as much as they could be.
"While some costs have gone up, others have gone down, which means consumers are still getting value for money."
The finger of blame is being pointed at farmers' fields in such far flung places as the Ukraine, Australia and Canada.
The good news for us all is that the particular global forces which are pushing these price rises are likely to pass.
The bad news though, is that the experts believe it won't be long before similar problems cause havoc with high street prices again.
The immediate problem is that world wheat supplies have fallen to their lowest level for 50 years, which has led to the price of foods like bread, beer and biscuits being pushed up, as well as, crucially, animal feed.
It follows two years of disastrous wheat harvests in Eastern Europe, Canada, Morocco and Australia.
The United Nations' Food and Agricultural Organisation reports that the two bad summers led to international production of wheat falling from 624 million tonnes to 600m tonnes. The growing popularity of meat-rich diets in developing countries has exacerbated the problem. Growing amounts of the annual wheat crop have been diverted in recent years to feed livestock, further reducing availability and increasing prices.
FOR farmers, the cost of wheat has contributed to a big increase in the cost of animal feed, with pig farmers seeing feed prices double in recent months, putting the whole pig industry in Scotland at risk, according to the National Farmers Union.
The worrying point is that, although this particular crisis is likely to pass, scientists believe the erratic global weather patterns, which are being blamed on global warming, will lead to more such crises in the future.
So, is there anything that can be done to protect us from perennial price rises hitting our weekly shop? As far as the Government is concerned, its powers are limited. Obviously, there is precious little it can do to stop the cost of crops shooting up around the world, or to maintain the level of world oil supplies.
There are growing demands though, on the Government, to use the powers it does have to ease the burden on consumers.
Cutting tax on petrol, the argument goes, would have a ripple effect across the economy.
With some feed prices paid by food producers doubling, any change the Government is likely to make would have a fairly limited impact.
But when you consider that, in the UK, we pay more tax on petrol than any other EU country it is a hard call for Chancellor Alistair Darling to ignore.
The cold fact is, that for every pound which is spent on fuel, remember, nearly two-thirds of that goes into the Government's coffers.
However, in his Budget on March 12, the Edinburgh South-West MP refused to ditch plans to impose a 2p rise in fuel duty, merely saying he would delay it for six months.
At a time when the credit crunch is creating worries throughout the economy the last thing anyone wants is to have to spend more on basic costs.
But it seems that, for the time being at least, we will have to tighten our belts and hope for the best.
The full article contains 998 words and appears in Edinburgh Evening News newspaper.
