How many of us are cheering that the Bank of England finally has hit its 2 per cent inflation target? I bark at my partner if she moves within six feet of the thermostat. I wince every time I put petrol in the car, and sigh whenever I do a grocery shop which seems to get dearer every week. That spontaneous outpouring of joy and gratitude to the Bank is hard to come by.
News that the cost of living is growing at a mere 2 per cent a year comes as scant consolation to many when wages are rising by an even more anaemic 0.9 per cent. The fact is that the headline inflation rate is largely irrelevant to most people's experience of the cost of living, based on the things they buy most often. Hence the last time that the Bank asked people what the inflation rate was in November –admittedly against the backdrop of energy companies announcing big bill increases – respondents gave the average answer of 4.4 per cent.
That was just before industry body Kantar published figures showing almost a third of households were shopping at the discounter Aldi in the last three weeks of the year.
People set their own inflation rate depending on what they spend. Yesterday's figures show, for example, the cost of computer games 0.7 per cent lower than a year earlier. If you wanted to buy a camera you were even more in luck – prices were down 14.1 per cent.
I'm not into computer games. But like most others, I'm into living somewhere, with electricity, gas and running water. About 18 months ago I started compiling my own inflation index of absolute bare minimum "unavoidables" from the Office for National Statistics' shopping basket, which includes food, electricity, gas and petrol. Unsurprisingly, that particular "unavoidables" rate went up from 2.2 per cent to 2.5 per cent in December. Within that, electricity is up more than 7 per cent and gas up more than 8 per cent on a year ago: factors to which the Lynch household's dual-fuel bills testify.
A less spartan index by Deutsche Bank, which also includes rail and road travel, housing maintenance and education, has risen to 2.7 per cent. So, in reality, the squeeze is intensifying.
Headline inflation becomes even less relevant to everyday experience when you remember the crucial fact that it's an annual rate. What happened a year earlier is pivotal when it comes to the latest month's figures: the economists' so-called "base effects".
For example, bad harvests sent food prices sharply higher in December 2012, so even though food prices rose last month, they didn't rise quite as quickly and hence they dragged the main number down. So falling inflation doesn't mean falling food prices. It's more revealing to look at price levels over a longer period rather than the annual inflation rate. These show you how far prices are spiralling ahead of actual wage growth. Take the average earnings figures, which are nominal (not adjusted for inflation). Total weekly average pay rose from £439 to £476 across the economy between March 2008 and October 2013 – that's 8.4 per cent over five and a half years. But the overall CPI index has risen from 106.7 to 127.5 over the same period, up more than twice as much, close to 20 per cent.
The news gets worse: if you look at the electricity, gas and other fuels component of the basket, it's up from 145.8 to 221.9 – a staggering increase of 50 per cent. No wonder we're all off to Aldi – it's the price our flexible workforce paid for lower overall unemployment during the downturn, spiking global energy prices and a weak pound.
Of course this pain isn't being shared equally. ONS figures published last month showed median household income for the population fell 3.8 per cent between the start of the downturn and 2011/12. In retired households, income was up 5.1 per cent since the start of the economic downturn, boosted by private pensions, while in non-retired households it fell 6.4 per cent. The Conservative-led coalition refuses to touch its core vote.
But there is hope. If the consumer spurt we've seen fuelling the economy feeds into higher productivity workers will be churning out more goods, average costs will fall and profits rise. That could encourage the bosses to open the purse strings and deliver the holy Grail of real wage increases after six long years.
And maybe my weekly shop will get a little less painful.