Page last updated at 23:10 GMT, Thursday, 19 June 2008 00:10 UK

How you are feeling the pinch

By Kevin Peachey
Personal finance reporter, BBC News

Shoppers on London's Oxford Street
The governor of the Bank of England says inflation could reach 4%

Chancellor Alistair Darling has warned that we face a "difficult year" and the governor of the Bank of England says take-home pay will stagnate, but what do you think?

Many hundreds of people have responded to the BBC's invitation to comment on where you are feeling the financial pinch the most.

From margarine to mortgages and gas to gadgets, about 3,000 people have pinpointed the issues that have hit them in the pocket.

The responses show that housing costs are particularly troubling people living in the South East. Those in rural areas are hot under the collar over the soaring price of heating oil. Just about everyone, everywhere is seeing their food bill rise - not just in the UK, but across the world.

But others have taken the chance to promote the values of budgeting, living a green lifestyle and making the most of the free things in life.

What's gone up for 10 years had to come down eventually, they say.

Roof rage

The BBC website's "mood map" asks readers to register the issue where they are feeling the squeeze the most.

It's not the average Joe's fault that banks previously lent stupid amounts to the wrong people
Richard in Lingfield

They have food, mortgages and rent, petrol and transport, gas and electricity, leisure and holidays to choose from, although many went for all of the above.

It is striking that a huge cluster of comments regarding housing and rent feature in the South East, where house prices remain the highest.

The latest Land Registry figures show the average home in London cost 350,925, and in the rest of the South East averaged at 229,289.

Ugo in London despairs that he can't find a studio flat to rent in the capital for less than 1,000 a month, and Richard from Lingfield says that remortgaging is going to cost him 200 more a month than his previous deal.

While the government is blamed by many for the extra costs in other areas, the banks are criticised for reckless lending during the housing boom which is now hitting homeowners as mortgages become more expensive.

"It's not the average Joe's fault that banks previously lent stupid amounts to the wrong people," concludes Richard in Lingfield.

Feeling the heat

News from senior industry sources that household energy bills could increase by up to 40% this winter would not have cheered those who already picked gas and electric costs as the biggest strain on their wallets.

Households across the UK have already had to endure double-digit price rises this year.

But it is those in rural areas of the UK who are among the most vocal. Already hit by their reliance on the car, they face soaring heating oil bills due to global prices.

Cecilia Milburn from Carrickfergus, Malcolm MacIntyre from Aberdeenshire and Mike from Rougham all lament the cost of oil-based central heating.

Paul McIntyre from North Muskham says: "Heating oil prices have gone ballistic, much more than gas and electricity. Heating our house is over 3,000 a year at current prices."

John Barton, of Norton, suggests wearing an extra jumper and going to bed earlier when it gets cold.

Food and fuel

Across the UK, the biggest drain on family finances, according to readers, is the cost of petrol at the pump.

Man carrying a for sale sign
The housing market and mortgages are a concern to many

One of the most extreme examples was Gary Finnigan in Sunderland.

"After losing my job and then my home, I now live now in a motorhome due to rising costs. However, due to the surge in diesel prices, this is becoming increasingly difficult. I worry now about what will become of me," he says.

Ben, in Boblingen in Germany, reminds everyone that the cost of petrol is a global issue, explaining that he is paying the equivalent of 1.21 a litre.

The same is true of food prices, with readers from New Zealand and Romania giving their views on the cost of feeding their families.

"The average family spends 8% of their monthly earnings on bread alone," says Peter Fogarty in Bucharest.

The increasing cost of basics such as milk, cheese and eggs helped to push inflation to a 10-year high of 3.3% in the UK in May, the latest figures show.

This is probably the reason why many perceive the inflation rate to be higher, as they write about their tastes not changing but their basket of goods going up in price significantly. Cooking oil and margarine are regularly mentioned.

'Reality check'

Fewer people pick out leisure and travel than any of the other categories as the issues that are causing them the most concern financially.

The downturn is like a brush fire. It is necessary every now and then to restore balance and allow regeneration
James in Tulse Hill

The annual getaway can often survive cuts in family finances, although one reader in Aylesbury asks "What's a holiday?"

Some people across the UK say none of the categories are affecting them, and some take the opportunity to point out economic realities.

"The downturn is like a brush fire. It is necessary every now and then to restore balance and allow regeneration," says James in Tulse Hill.

"House prices will become more reasonable and people will have access to the bottom rung. Mortgage lenders will look more carefully at their prospective suitors.

"People may try and live within their means, rather than maxing out multiple credit cards and indulging in excessive consumerism."

And others preach the virtues of a prudent lifestyle.

"We've adopted a bit of a war-like mentality - growing our own vegetables, got some hens and thinking if a journey is really necessary," says Jane in Shropshire.

"What is wrong with being more careful with the things we use? Why do we need the latest gadgets etc? You can get pleasure out of being more careful and inventive."

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