The Coutts Luxury Price Index (CLPI), which measures luxury inflation, rose by 5.9% for the 12 months to the end of October – more than double the latest Consumer Prices Index figure of 2.4%.
The CLPI gives a researched, accurate measure of the effects of inflation on high-end items and experiences. It covers around 150 goods and services from across 12 categories. A key finding from the latest CLPI, published twice a year, is that secondary school fees have tripled in 20 years and the cost of a private education continues to rise faster than inflation. School fees and phones are among the areas pushing up prices so fast.
The report reveals that the price of a private education – including nurseries, private school fees and tutoring – rose by 4.3% over the past year. Private secondary school fees are 185% higher than they were 20 years ago and over 50% higher than in 2008, according to data from the Independent Schools Council. The commission says one term at a private senior boarding school now costs £11,228 on average, up from £7,353 in 2008 and £3,939 in 1998. Today’s equivalent price per term for a non-boarding private school is £4,618. International demand for a British education, rising staff costs and increased investment in facilities are among the reasons behind the rises.
Other headline numbers from the latest CLPI include:
Clothing prices are up 5.2%, with some brands raising prices by as much as 11%. Global luxury brands have exercised the ‘pricing power’ linked to the fierce customer loyalty they command by raising prices higher than inflation consistently over the past two years. Smaller, independent luxury retailers, on the other hand, have kept their price rises steadier.
The popularity of portable technology abounds with prices in the communications category – which includes smartphones and tablets – soaring over 16%. This is perhaps unsurprising when a phone costing over £1,000 is now commonplace.
Alcohol has risen rapidly once again, with fine wine up 11% and whisky – a maturing investment market but not yet on the scale of wine – up 26%.
Household goods and services have shot up, seeing their largest price rise since the CLPI began in July 2017 – 10%. This could be due to the current uncertainty hanging over high-end UK property because of Brexit, among other things. People are possibly doing up their existing homes rather than buying new ones and service providers are raising prices accordingly.
Luxury food prices are up almost 18%, influenced by the price of native oysters rising by 21%. This was largely due to an increase in demand from China and loss of natural habitat – 85% of the world’s oyster beds and reefs have been lost due to pollution, disease and predation.