The Price of a Freddo as an Economic Indicator

Before we start, let me explain to those readers outside of the UK, the significance of a Dairy Milk Freddo chocolate bar and its relevance to this post. The “Freddo” is an 18g (0.63 oz) chocolate bar, in the shape of an anthropomorphic frog. When it was re-launched by Cadbury in 1990 (it had previously been manufactured by an Australian confectionery company in the seventies), it was priced at 10p (£0.10). It remained at that price until 2005 when a 1p to 2p increase began to occur each year. By 2016 Freddos were retailing at 25p. However, the following year the price “lept” to 30p with an increase that was double its usual yearly rise. This led to public outrage across social media. Since then the price of a Freddo has waxed and waned. Tesco supermarket reduced the price back to 10p as part of their centenary celebrations. The post COVID price in 2022 hit 49p. At present, the average price of a Freddo in the UK is somewhere around 35p.

Before we start, let me explain to those readers outside of the UK, the significance of a Dairy Milk Freddo chocolate bar and its relevance to this post. The “Freddo” is an 18g (0.63 oz) chocolate bar, in the shape of an anthropomorphic frog. When it was re-launched by Cadbury in 1990 (it had previously been manufactured by an Australian confectionery company in the seventies), it was priced at 10p (£0.10). It remained at that price until 2005 when a 1p to 2p increase began to occur each year. By 2016 Freddos were retailing at 25p. However, the following year the price “lept” to 30p with an increase that was double its usual yearly rise. This led to public outrage across social media. Since then the price of a Freddo has waxed and waned. Tesco supermarket reduced the price back to 10p as part of their centenary celebrations. The post COVID price in 2022 hit 49p. At present, the average price of a Freddo in the UK is somewhere around 35p.

Although to the layman the price of a Dairy Milk Freddo chocolate bar may seem somewhat trivial, it has started to appear as some sort of economic indicator in the tabloid press and in mainstream political discourse. This was further compounded in October 2024, Labour MP Patrick Hurley launched a campaign to reduce the price of the Freddo as a way to engage young people in politics and discussions about the cost of living crisis. Although it was as somewhat light-hearted statement, the use of a Freddo as an accessible frame of reference, does have some merit. It is easily defined and quantified, as well as being very easily recognised. However, does such a consumer item serve any real use in economic discourse? Funnily enough, the answer is actually, “yes”, although it is mainly as an illustration of inflation, rather than a genuine economic indicator.

The Freddo works unusually well in public discussion because it is familiar, inexpensive and easily remembered. Many people recall it costing about 10p during the 1990s and early 2000s, whereas it now commonly costs roughly 30–35p, although individual retailers may charge considerably more. That makes the cumulative effect of rising prices immediately comprehensible in a way that an abstract index number often is not. A Freddo can be used as a small case study for the following:

  • Price inflation: How the nominal price of a fixed product rises over time.

  • Shrinkflation: Whether the weight or quantity changes as well as the price.

  • Price stickiness: Inexpensive products often remain at one conspicuous price for years, then rise in relatively large steps rather than moving smoothly.

  • Supply chains and costs: Chocolate involves cocoa, milk, sugar, energy, packaging, transport, labour and retail margins.

  • Consumer psychology: People notice frequent and familiar purchases more than many larger but less frequent expenses.

That last point is economically important. Bank of England research has found that food prices have a disproportionately strong influence on British households’ perceptions and expectations of inflation. Other research similarly indicates that consumers tend to form their inflation expectations partly from the grocery prices they personally encounter. A memorable item such as a Freddo can therefore tell us something about how inflation is perceived and discussed, even when it tells us little about the true overall inflation rate.

However, the Freddo is just one branded product, made by one company and sold by retailers with different pricing strategies. Its price may change because of promotions, profit margins, packaging decisions, brand positioning or a manufacturer’s desire to maintain a convenient price point. Indeed, analysis of its production costs suggests that fluctuations in the cocoa price alone account for only a limited portion of what shoppers pay. The Freddo also represents a negligible portion of normal household expenditure. Official inflation figures instead track a large, weighted collection of representative goods and services. The Office for National Statistic’s 2026 CPI basket contains 760 representative items, with their influence determined by how much households collectively spend on each of the relevant categories. Housing, transport, energy and services consequently matter far more than a small chocolate bar.

Overall, the Freddo is best regarded as a cultural cost-of-living index, rather than a more significant economic indicator. It is a good indicator of how inflation feels, a useful teaching device for explaining cumulative price rises and an interesting microeconomic example. That being said, it is not a sufficient instrument for measuring the overall state of the British economy and its complexities, which is why the Chancellor of the Exchequer does not feature them in their fiscal policies or end of year budget analysis. Used light-heartedly, it makes economic discussion more accessible. Used as evidence that official inflation is inaccurate, or as a substitute for CPI, wage growth, household costs or purchasing power, it becomes misleading. The distinction is essentially one between economic storytelling and economic measurement. But it does makes for a fun blog post. What is the equivalent of a Freddo in your country?

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Fighting the Cost of Living

Our household is currently trying to reduce our monthly overheads in response to the ever increasing cost of living. April is not that far away and a great many service providers will increase their rates and tariff as the new financial year begins. Then there is the ongoing effects, both direct and indirect, of inflation to consider. Although the UK inflation rate is dropping, currently sitting at 3.4% in December 2025, food inflation remains higher at 4.5%. Being based in the UK, salaries and billed services tend to be administered monthly. You get paid usually at the end of the months and bills can turn up at any point, depending upon when you started a service. Any payments coming from central government, such as state pension or other benefits, are paid every 4 weeks. This means that there are 13 payments in a year. I thought it pertinent to clarify this point as other countries, such as the USA, favour a fortnightly financial cycle. Hence as a household we work around a monthly budget.

Our household is currently trying to reduce our monthly overheads in response to the ever increasing cost of living. April is not that far away and a great many service providers will increase their rates and tariff as the new financial year begins. Then there is the ongoing effects, both direct and indirect, of inflation to consider. Although the UK inflation rate is dropping, currently sitting at 3.4% in December 2025, food inflation remains higher at 4.5%. Being based in the UK, salaries and billed services tend to be administered monthly. You get paid usually at the end of the months and bills can turn up at any point, depending upon when you started a service. Any payments coming from central government, such as state pension or other benefits, are paid every 4 weeks. This means that there are 13 payments in a year. I thought it pertinent to clarify this point as other countries, such as the USA, favour a fortnightly financial cycle. Hence as a household we work around a monthly budget.

Broadly speaking, our monthly outgoings breakdown as follows. I would assume that this is fairly universal. Council tax which funds the local authority and the services they provide. Then there are utilities such as gas, electric, water, mobile phone and internet. Most people have travel expenditure or the cost of running a car. Then there are groceries. Perhaps the biggest monthly expenditure for most people these days is paying for housing. Be it a mortgage or rent. Some of these things have very little scope to be reduced as customers have very little agency in the markets that govern them. Hence mortgages, rent and local taxation tend to increase steadily and can only be addressed by an increase in income or by moving. Travel, car and utility costs do have scope to be reduced. There are alternative vendors and a culture of changing service providers and securing the best deal. However, that only works if the vendors operate in your area.

At the end of last summer, we signed up to a fixed cost tariff from our energy provider. This is the second year that we have done this and it has proven financially prudent. It was unusually hot in the UK throughout June, July and August in 2025, hence we used a lot more power than usual trying to keep the temperature in the house equitable. The tariff meant that we weren’t hit by excessive costs for our three months of increased power usage. Other providers increased their base costs to capitalise on the heatwave. We have also given thought to having solar panels installed on the roof. We’re fortunately based in a warmer part of the UK and there are several schemes available at present that have favourable terms. However, our heating systems is still gas based and therefore wouldn’t benefit from such an undertaking. We could replace the heating system but that is sizeable capital investment. However, there are grants to help make such transitions.

Perhaps the areas with the greatest scope for financial savings are from services such as internet provisions, mobile phone tariffs and streaming platforms. We’re shortly moving to a new ISP and maintaining an identical service for half of our current cost. Both Mrs P and I have moved to SIM only phone contracts, electing to get off the expensive, yet pointless upgrade treadmill. We have also cancelled or replaced some streaming services. I am also trying to eliminate the costs associated with certain software services like Office 365. All of these sorts of saving can initially appear quite small and possibly inconsequential. However, once you add them to a spreadsheet and see the accumulative savings, they prove their worth. Exactly the same can be said with regard to supermarket loyalty cards and their respective members discounts. We no longer shop exclusively at just one supermarket but will go to specific stores to get deals on frequently used products.

There is one other area of potential financial savings that can be addressed but is often neglected due to customer apathy and fear that it may all go wrong. That is changing bank accounts, credit cards or moving your savings. It never ceases to amaze me how some folk will chase a deal online or in the actual stores but are quite content to let their wages stagnate in a current account with little or no benefits, or who miss out on higher interest rates by not moving their savings around. Legacy banks are no longer the best default options and there are now plenty of new online only institutions that are trying to increase their market share. The incentives on offer are not just purely money based. Many banks offer “freebies” such as subscriptions to services such as Netflix and Spotify. Plus transferring an outstanding credit card balance to a new providers can still yield substantial benefit. I guess people treat their banking differently from other services, when it really isn’t.

However, I don’t advocate turning cost savings into an all consuming ideology. For example, I will from time to time buy “reduced” label items in the supermarket but I have no intention of living exclusively that way. Some brands have a cost that simply doesn’t fluctuate and don’t have an immediate lower cost equivalent. For example, I won’t eat cheap biscuits from pound stores just to save a few pennies. I’d rather have some good quality indulgences from certain stores, than a larger quantity of inferior products, from a discount outlets. Like many things in life, looking for a deal needs to be tempered with common sense. Another essential tip is to visit websites that collate information on the best deals available, such as Uswitch in the UK. Or to follow people like Martin Lewis on social media, who have made consumer advice their career. Making savings to your monthly expenditure is no longer an optional extra but an imperative. Good luck in your pursuit of a good deal.

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"Awful April" and the UK Cost of Living

Sunday 6th April is the start of a new financial year, here in the UK. According to data from numerous financial and economic institutions, an estimated million plus households will be facing annual increases of £400 to £500 as the proverbial “cost of living” goes up. Everything from Council Tax to Mobile and Broadband costs are being increased. Future cost hikes are expected in our energy and water utilities. As bills start going up across the country today, average wages remain stagnant. Middle-income and poorer households have been worst hit by this wage related issue. Hence the tabloid press have labelled the start of the new financial year as “Awful April”. Hyperbole aside, this is a very real issue which due to its complex, global causes, doesn’t have a quick fix solution.

Sunday 6th April is the start of a new financial year, here in the UK. According to data from numerous financial and economic institutions, an estimated million plus households will be facing annual increases of £400 to £500 as the proverbial “cost of living” goes up. Everything from Council Tax to Mobile and Broadband costs are being increased. Future cost hikes are expected in our energy and water utilities. As bills start going up across the country today, average wages remain stagnant. Middle-income and poorer households have been worst hit by this wage related issue. Hence the tabloid press have labelled the start of the new financial year as “Awful April”. Hyperbole aside, this is a very real issue which due to its complex, global causes, doesn’t have a quick fix solution.

Here a some of the increases the UK public face:

  • The majority (88%) of households in England will face a maximum increase in council tax of 4.99%  which adds an average of £109 to a typical band D bill. Due to some councils facing severe financial hardship Bradford, Newham, Birmingham, Somerset, plus Windsor and Maidenhead have been granted permission to raise council tax above the current 4.99% cap.

  • Average energy bills are expected to rise to £1849 annually. Energy regulator Ofgem has increased the price cap for the third time, resulting in an extra £9.25 per month. Fixed-rate deals will see no change in cost until their term expires.

  • Water bills are expected to rise by 26%, which is £123 annually. Last March, private water firms in England reported a £1.7 billion pre-tax profit. Yet the public still endure an expensive service, regular leaks and sewage discharges into the UK waterways and coastal areas.

  • As of April 1st, 2025, food inflation in the UK continues to rise, with food prices overall 2.4% higher than last March. This itself was up from 2.1% in February, according to the British Retail Consortium-NIQ shop price index. 

  • There are also scheduled increases in the cost of UK vehicle tax, TV license, mobile and broadband services and many other consumer industries.

These factors combined with the prospects of a global trade war and other geopolitical problems, mean that the economic prospects for the next financial year are far from good. The dour economic outlook makes it increasingly difficult for the UK government to rebuild the country’s crumbling public services and hamper wider plans to grow the economy. As for the public, wage stagnation coupled with the freezing of income tax thresholds until April 2028, will mean that many households will struggle financially. Shortfalls in disposable income frequently leads to daily expenditure being paid for by credit card. As of April 2024, UK households held an average of £2,487 in credit card debt, with total outstanding credit card debt reaching £70.1 billion. This is a 7.02% increase year-over-year. 

Wealth and poverty can be relative things. For example, does choosing not to get into debt to finance a family holiday make you poor or just financially prudent? Can you be poor with an annual salary over £100,000 a year? As ever in life, simple or binary answers tend to be spurious and inaccurate. Nuance, complexity and context are required to reach a greater understanding. However, there comes a point when the realities of increasing monthly costs upon a household budget is no longer debateable. I do not consider my own financial situation to be dire, however the recent increases in the cost of living, especially with regard to food inflation have been clearly noticed and felt. As it is unlikely that any major changes or assistance are going to be forthcoming from the state, I suspect many of us will be looking at our own personal budgets and determining what costs can be reduced in the months to come. “Awful April” may well become a much longer affliction.

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