17 January 2012 Last updated at 05:20 ET

How rising prices are hitting your pocket

The cost of living continued to rise at the end of 2011, although at a slower rate than in November, figures from the Office for National Statistics have confirmed. So, where were prices rising or falling, and what do experts suggest we can expect in the year to come?

Impact of inflation on UK goods and services
Category	Inflation rate	Examples	2012 prediction
Source of data: ONS; % change over 12 months to Dec 2011
Food and non-alcoholic drinks	3.8%	Bread and cereals: 3.1% Fish: 6.4% Fruit: 0.5% Coffee, tea, and cocoa: 9.6%	James Walton, chief economist at analyst IGD, says: "There are three main forces driving global food prices upwards: rising population, the increasing wealth of shoppers in Asia and energy prices. These are all long-acting factors and are unlikely to disappear any time soon. "In 2012, we expect food prices will continue to rise, but at a slower rate." This is the result of last year's good harvests, weakening of the Asian economies, and VAT. "But the weather is always a wildcard factor and the continued low rainfall in key agricultural parts of the UK may create localised shortages for specific products," he says.
Alcohol and tobacco	9%	Spirits: 8.4% Wine: 4.1% Beer: 5% Tobacco: 11.8%	Jon Howard, from the Campaign for Real Ale (Camra), says: "Drinkers should expect nothing less than a 20p to 25p hike on a pint down their local [in the coming year]." Publicans face pressures including increasing overheads, and taxes. The industry faces rising raw material costs before a barrel of beer leaves a brewery's gates.
Clothing and footwear	1.8%	Garments: 2.6% Other clothing and accessories: -1.4% Footwear: -2.3%	Any increase in prices was offset by reductions at sale times in 2011, according to Isabel Cavill, at analysts Planet Retail. "Retailers are either not raising prices this year or in a position to reduce. Clothing retailers are increasingly looking at other areas to cut down on costs," she says. This may be by using blends of materials, by keeping stock levels low, as well as moving to cheaper regions to manufacture items.
Housing and services	7.9%	Materials for maintenance and repair: 7.2% Electricity: 14.1% Gas: 19.8%	After winter price rises, the season proved to be mild and a dip in wholesale prices have led energy companies to reduce gas and electricity prices at the start of 2012, but there are fears of future rises. "Energy bills include a number of costs, many of which are increasing," says British Gas. "If you want to buy gas in the wholesale market now for delivery at the end of 2012, it is already trading at a price more than 14% higher than at the end of 2011." Npower says much the same.
Transport	5.8%	New cars: 3.1% Secondhand cars: -2.7% Fuels and lubricants: 9.4% Passenger transport by railway: 6.7%	Edmund King, president of the AA, says that there will be pressure of price rises for petrol and diesel. "Volatility in the markets and uncertainty, caused by global events, will continue to worry drivers. A return to last year's record high prices are a short-term possibility, if only because a lack of transparency in the market has allowed the industry to keep pump prices in many UK towns higher than they should be."
Communication	6.6%	Postal services: 10.5% Telephone equipment and services: 6.2%	Ernest Doku, of price comparison website Uswitch, says: "In 2011 the major players largely swallowed the VAT increase themselves, driving down prices in a battle to lure cash-strapped consumers. Prices fell particularly sharply in the run-up to Christmas." Hefty data bundles with the latest handsets will be offered to mobile customers, but without pushing up the price, he predicts. "However, the networks do have one very expensive cloud on the horizon - the 4G auction due at the end of the year. They'll have to pay large sums for the right to provide the service, and will seek to recoup their costs from early adopters of the new technology."
Recreation and culture	-0.7%	Games, toys and hobbies: -3.5% Pets and related products: 5.3% Books: -2.2%	Consumers have put pressure on retailers to drop their prices. Book sales analyst Nielsen Bookscan calculated an average 26% discount on books, excluding e-books, in 2011. But this discounting seems to have levelled off in an overall market that is shrinking. Frederique Tutt, of analysts NPD, says that for toys, manufacturers' costs are rising as wages rise in China, but they remain aware of financial pressures facing UK consumers.
Restaurants and hotels	4.4%	Restaurants and cafes: 4.9% Canteens: 4.7% Accommodation services: 1.8%	The tourism market may prove to be difficult to predict in 2012, given the effect of the Olympics. Miles Quest, of the British Hospitality Association, says that hoteliers are keen to maintain prices, but if demand is high then prices will go up. Restaurants are more reliant on domestic customers, and owners are facing higher costs and a continued cutback in consumer spending.