Surging food prices and rising inflation have hit pensioners hardest, says Alliance Trust.

The over 75s continue to be hit the hardest by rising inflation, having seen their level of inflation increase from 4.8 to 5.4 per cent in June.

According to Alliance Trust’s independent study of age-related inflation, the rates facing all other age groups have also increased, and the majority are running ahead of the headline rate of 3.8 per cent.

Inflation continues to be driven by the sharply rising prices of basic goods, and the over 75s have been hit particularly hard by the increase in the cost of food, which has risen by almost 11 per cent over the past year.

Shona Dobbie, head of Alliance Trust Research Centre, says, ‘Food prices are now rising at almost 11 per cent, with the prices of basic goods, such as dairy products, rising at a rate of over 19 per cent. This affects the elderly in particular, with these households spending a higher proportion of their budgets on the more basic food items.

‘Utility prices continue to rise, with gas price inflation currently running at over ten per cent and electricity price inflation running at more than 11 per cent. On top of this, petrol price inflation, at 24 per cent, is hitting everyone hard.’

And things aren’t expected to get easier any time soon, as Alliance Trust predicts that inflationary pressures will remain strong over the coming months.

Dobbie concludes, ‘Unfortunately, we expect little respite from this situation over the next couple of months as the oil price is expected to remain high and gas and electricity prices are expected to move higher.

‘The danger is that this high level of inflation forces policymakers to leave interest rates higher for longer, increasing the risk of an even greater slowdown in demand and threatening the economy as a whole.’