is at 4.3 per cent. However, many people face a real inflation rate much higher than either measure. For those families who just buy the essentials, an inflation rate of 10 per cent is much nearer the mark.

Official inflation is only measured by the rise in the cost of a basket of goods. The real rate depends solely on the goods we actually buy. For instance the 1.5m households that rely on home heating oil have faced an increase of 84 per cent in their energy bills. For pensioners who spend more than 10 per cent of their income on heating (as many do), the household inflation rate will be that much higher.

Indeed for the millions of Britons who are just spending money on the basics - food, shelter and getting to work - prices have rocketed far above the offical rate. For example while food has risen by 8.7 per cent, staple items have risen even higher: milk cheese and eggs by 16.6 per cent, meat by 9.1 per cent and simple household butter by an astounding 31.9 per cent. The rate for working-class families is depressed by items

they don't buy like fruit, which only increased by 2.4 per cent, whereas oils and fats, which they do consume, shot up by 20.1 per cent.

Similarly it is important to calculate the marginal impact of inflation rates on different aspects of household expenditure. For instance, on things like mortgages and rent, inflation has gone up by 4.8 per cent, which at first sounds OK until you realise that paying for housing takes the majority of any average wage earner's pay packet, so a small rise can mean hundreds of pounds extra to find each month.

Just earning the money to cover the basics has become an increasing struggle; house insurance and ground rent have risen by 12.5 per cent, water bills by 6.5 per cent and gas and electricity by 11.2 per cent. And, of course, even getting to work to pay the bills costs more: petrol has risen by 19.5 per cent. The latest news is that domestic bills will rise further - with energy expected to increase by another 40 per cent before Christmas. Year on year, the effects of these rises are compounded: gas has risen by 108