27th September 2026
For households trying to keep control of their finances, the worrying thing about the latest cost-of-living pressures is that there is no single cause.
Instead, several different costs are beginning to move in the same direction.
Diesel prices have risen sharply. Household energy bills are increasing again from 1 October, with further increases being forecast for January. Food prices are still rising, although not yet at anything like the rate seen during the worst of the recent inflation crisis. And here in Caithness, taxi fares have now increased too.
Each increase can be considered separately.
Taken together, however, they tell a rather different story.
The October energy price cap will increase by 4%, taking the typical annual dual-fuel bill from £1,663 to £1,723.
That is a relatively modest increase compared with the huge rises experienced during the energy crisis. But it comes at a time when many households have already absorbed years of higher prices.
And January could bring another increase. Current market forecasts point to a further rise in the energy price cap, although forecasts several months ahead are inevitably uncertain and could change considerably.
Then there is diesel.
The latest figures show just how rapidly fuel costs have moved. The average UK diesel price reached 181.8p per litre in August, with the price rising by 14.2p in that month alone. Diesel was 23% more expensive than a year earlier.
For a rural area such as Caithness, that matters.
Long journeys are often unavoidable. A trip to Wick, Thurso or Inverness can involve considerably more driving than would be necessary in a city where shops, hospitals and other services may be much closer.
But the effect of expensive diesel does not stop with the person filling up the car.
Farmers use fuel. Hauliers use fuel. Builders use fuel. Delivery vans use fuel. Food producers and distributors depend on transport.
Eventually those costs can find their way into the prices charged for goods and services.
Food provides a good example.
Official figures show that food and non-alcoholic beverage prices were 1.3% higher in August than a year earlier. That is nowhere near the extraordinary increases experienced during the energy crisis.
But there can be a considerable time lag between higher fuel costs and higher food prices.
The food on a supermarket shelf has already travelled through a complicated supply chain. Fuel is involved in growing, harvesting, processing, packaging, transporting and storing many of the products we buy.
A sudden increase in diesel does not automatically add 10p to the price of a loaf of bread the following morning.
But if higher transport and production costs persist, businesses eventually have to decide whether they can absorb those costs or whether some of them have to be passed on.
This is where the latest increase in Caithness taxi fares provides a useful local illustration.
For taxi users, the increase is another household expense.
For taxi operators, however, it is also a reflection of the rising cost of providing the service. Fuel is only one expense. There are insurance, servicing, repairs, tyres, licensing and vehicle replacement costs.
A higher fare does not necessarily mean the taxi driver is making more money. It may simply mean that the business is attempting to remain viable.
The same principle applies throughout the economy.
When a farmer faces higher costs, when a haulier faces higher diesel prices, or when a small shop faces higher delivery and electricity costs, the business cannot simply create money to pay the difference.
Eventually somebody has to absorb the cost.
That creates a chain reaction:
Higher fuel costs → higher business costs → higher prices for goods and services → greater pressure on household budgets.
And households are experiencing some of those increases directly at the same time.
This is why the October Budget will be particularly important.
The Chancellor could decide to delay or modify a planned increase in fuel duty, which would prevent an additional tax increase from making the situation worse.
But it would not reverse the underlying increase in the price of diesel.
Nor can the UK Government control international oil markets or wholesale energy prices.
There is also a limit to how much additional financial help the Government can provide when its own borrowing and debt-interest costs are already placing pressure on the public finances.
For households, therefore, the problem may not be one spectacular increase.
It could instead be a series of smaller increases arriving from different directions.
And that brings us to an important point about inflation.
People do not actually experience the national inflation rate.
They experience their own personal inflation rate.
Someone who drives 20,000 miles a year will feel higher diesel prices much more than someone who rarely drives.
Someone who depends on taxis will notice taxi fare increases more than someone with their own car.
Someone living in an oil-heated rural home faces a different set of pressures from someone in a centrally heated city flat.
The national inflation figure is an average. Household experiences are not.
That is particularly important in Caithness, where distance can make it more difficult to avoid higher transport costs.
The immediate food-price figures may therefore not look particularly frightening.
But if expensive fuel remains with us, there is a risk that some of its effects will continue working through the economy for months.
The cost-of-living squeeze may not be returning in exactly the same form as before.
It could be more gradual and less dramatic, but still significant.
Instead of one enormous increase, households may find themselves dealing with higher energy bills, more expensive fuel, rising food costs and higher charges for everyday services, one after another.
The question may therefore not be whether any one price rises.
It may be how many prices rise before the pressure finally eases.