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Speaker 1: Figures today from the Competition Commission showing the price you

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Speaker 1: pay for electricity has gone to buy eighty five percent

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Speaker 1: eighty five percent since twenty twenty. Water price is sixty

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Speaker 1: eight percent up in that period. In other words, despite

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Speaker 1: lower inflation, most people are still just battling to get

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Speaker 1: through the month. They released their twenty twenty six Cost

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Speaker 1: of Living report today. The principal economist at the Competition

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Speaker 1: Commission is RuSHA Dhaji, Russia. Good evening, This is really

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Speaker 1: about administered prices, the price we pay for something that's essential.

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Speaker 1: You can only get it from one place, from a

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Speaker 1: government entity. How big an impact of these prices having

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Speaker 1: on people's daily lives.

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Speaker 2: Yes, thank you so much for having me so, you're

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Speaker 2: quite right. The electricity prices have increased by about eighty

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Speaker 2: five percent, water sixty eight percent, And these are quite

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Speaker 2: significant increases over the five year period. And these increases

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Speaker 2: have an impact on items such a food. Because electricity

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Speaker 2: prices go up, water prices go up, it affects a

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Speaker 2: whole lot of items that consumers rely on, and basically

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Speaker 2: it squeezes consumers budgets. So low income households are already

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Speaker 2: struggling with limited budget, and now if they have to

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Speaker 2: pay more for electricity for water, then it reduces their

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Speaker 2: income that's available for other necessities like food, education, hospital bills.

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Speaker 2: There's a whole number of other necessities that consumers rely

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Speaker 2: on and that gets affected when one item basic necessity

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Speaker 2: is crossing creases.

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Speaker 1: Yeah, it's really interesting to sort of go through the

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Speaker 1: surveys that you've done over the last few years. I mean,

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Speaker 1: primary school inflation is up, high school inflation is actually

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Speaker 1: higher than primary school inflation. Education matters to so many families.

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Speaker 1: What's driving that.

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Speaker 2: So what we've found is that it's what's causing these

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Speaker 2: increases is mainly operational cost increases which are not fully

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Speaker 2: covered by government funding. So we know that some of

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Speaker 2: the public schools are not fully funded by government. So

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Speaker 2: these are the ones that we looked at where school

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Speaker 2: fees are paid by parents, so there's part funding by

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Speaker 2: government and because of a rise in operational costs, Yeah,

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Speaker 2: the government subsidies that they receive are just not sufficient

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Speaker 2: to cover the costs. There's also other even electricity costs

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Speaker 2: would affect them as well. Because these are all increases

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Speaker 2: the operational needs and because the subsidies are not sufficiently

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Speaker 2: covering that their costs are just increasing and therefore the

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Speaker 2: school fees are increasing.

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Speaker 1: Food price inflation really matters as well. In maze meal

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Speaker 1: very important. We've seen the production costs of that actually

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Speaker 1: come down according to your report, a maze meal prices

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Speaker 1: coming down to are food markets working as they should?

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Speaker 2: No, So for maize meal, what we've found is that

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Speaker 2: the price of white maze seeds has decreased, as you say,

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Speaker 2: so the seeds maye seeds have decreased the price. But

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Speaker 2: what we see is that the producer prices for the

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Speaker 2: cost of producing maize meal and the price that they

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Speaker 2: charge has not come down to the same extent. So

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Speaker 2: at the producer level, even though the input, which is

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Speaker 2: the maze seeds, the price has come down significantly, producer

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Speaker 2: prices for maize meal are still quite high and retail

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Speaker 2: prices are also high. So we're not seeing that passed

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Speaker 2: through to consumers even though the seed price has decreased.

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Speaker 1: I mean, as a sort of shorthand on we try

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Speaker 1: and assess how people are doing. We look at the

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Speaker 1: inflation rate. It's one number, it's sort of relatively easy

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Speaker 1: to understand. And yet from your report, which is obviously

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Speaker 1: much more detailed. It's not rarely giving us an accurate

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Speaker 1: picture of what's going on, and I mean partly that's

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Speaker 1: because of what's in the in the CPI basket. You

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Speaker 1: have appliances in there, for example, most people don't buy

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Speaker 1: an appliance every month or even every year. Do we

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Speaker 1: need another way of understanding, another shorthand way, maybe another

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Speaker 1: figure or another mechanism or something to understand how people

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Speaker 1: are doing? Because when inflation is as low as it is,

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Speaker 1: you kind of think, great, life's getting better for people,

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Speaker 1: but from your report, it clearly isn't.

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Speaker 2: Yes, So this is what the report tries to do.

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Speaker 2: So we look at how prices are, so we track

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Speaker 2: prices and compare them to overall inflation. So you're quite right.

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Speaker 2: Overall inflation has come down, and it creates an impression

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Speaker 2: that prices have come down. But if you look at

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Speaker 2: individual items and focus specifically on what low income households

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Speaker 2: are consuming, then the individual items do show a different picture.

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Speaker 2: And some of the above inflation increases that we have seen,

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Speaker 2: as we've pointed out in the report, are electricity, water, education,

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Speaker 2: even primary healthcare services. So these are above inflation, and

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Speaker 2: the report tries to point that out to show you

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Speaker 2: know where consumers are impacted by a large amount.

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Speaker 1: Raksha Dharty, thanks so much, Principal economist at the Competition Commission.

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Speaker 1: I found the report fascinating. Available on the Competition Commission website.