Why does a shopping trip cost twice as much?

In the shops, some items now cost two or three times as much as before, yet official annual inflation was 14.5%. How can that be? Why do the numbers not add up?

You need to know how annual inflation is calculated. There is an imaginary “inflation basket” containing 700 products, and statisticians examine how its average price changed from one year to the next.

This is an average across 700 products, from toothpicks to space rockets. You obviously do not buy 700 products in the shop—perhaps seventy, or not even that. That is where the problem begins.

The products you do buy are typically food, and many of those have doubled or tripled in price. That is why the calculation does not match your experience: your inflation is not 14% but can be 30–40%.

Consequently, regardless of what the statistics show, inflation affects your personal life much more severely.