Some good news among the financial gloom!

We are going to able to save some money on our food bills.

This because a rice war has broken out between the UK's largest supermarkets as a flurry of discount offers designed to attract cash-strapped consumers is announced.

Tesco will reduce the price of 3,000 items by up to 50% from today in an attempt to win back those of us struggling to cope with record petrol prices and utility bills.

On Friday Asda was helping customers to "fight back against inflation" with price cuts to 10 staple items. A customer buying the whole range of goods in one of Asda's 329 stores would see their shopping bill reduced from £10.83 to £5.83. That’s 30% less than you would have paid for the same goods 12 months ago.

Asda has already started selling a 2p sausage (16p for a packet of eight) and has slashed the price of mince from 96p to 50p. Its 50p promotion is being seen as an attempt to tackle big discounters such as Aldi and Lidl head on.

(However, the ‘quality’ of 2p sausages is certainly up for debate!)

• Discount supermarkets doing well

Aldi, the German-owned discount chain, has seen a 20%  per cent rise in sales over the past month; the fastest growth rate in Britain. The number of shoppers visiting its 400 stores has gone up by 35% in the last 3 months. 

Meanwhile, Iceland has seen a 15% rise in sales (that is Iceland the frozen food chain, rather than Iceland the puffin eating country). Marks & Spencer, meanwhile, has seen a 3.2% fall in takings in its food halls in the past month.

Sainsbury’s started a “Feed Your Family for a Fiver” campaign in March, backed by the celebrity chef Jamie Oliver, while Morrisons cut the price of 2,000 items this month.

• Families cutting back

The supermarkets are having to reduce their prices despite soaring costs because as we all become a bit more cash strapped, we are cutting back on our weekly shopping so we can afford higher electricity and gas charges, motoring cost and mortgages.

The credit crunch has seen an unprecedented sales boom at budget supermarkets such as Aldi and Lidl.

Meanwhile, the biggest supermarket name, Tesco, has already cut more than £400 million from prices this year! Now it is going farther, placing more emphasis on its cheaper, own-label goods.

Tesco pockets nearly £1 of every £7 we spend on the high streets and has more financial muscle than anyone else. One retail executive said the retailer had been “arming itself” in recent weeks by trying to wring more money from its suppliers, before a price battle at the checkout.

Because of the credit crunch, nearly 30% of the goods in the big four supermarkets are on special offer now; up from 20% a year ago.

• Grocery bills going up

We have all been seeing our grocery bills rocket in the last year as higher commodity costs push up the price of wheat and rice. National Statistics now believe that food price inflation is running at close to 9%. The high cost of items such as pasta, eggs and cheese has been blamed for Britain’s inflation rate hitting its highest level for nearly 18 years (which is daft thing to claim!)

MySupermarket.co.UK claims that a typical family faces a £1,000 rise in the amount it spends in supermarkets over the next 12 months.  Its last survey suggested the cost of a typical family shop had risen by 21% over the past year to £120.

The director of mySupermarket, Johnny Stern, said supermarkets were offering other price cuts alongside their special offers:

"We can see that supermarkets are making a significant effort to help consumers combat the credit crunch by reducing prices on many items."

The move to value shopping has been striking, with Aldi reporting a year-on-year sales growth of 21% and Sainsbury's reporting a 300% increase in sales of some of its Basics range of products.

Meanwhile, in something that doesn’t come as a complete surprise, sales in organic products have now slowed.

By the way, can anyone tell us why good healthy organic stuff costs so much more than all the stuff with pesticides in?

• Pricing war now in full effect

Analysts believe that the recent series of price promotions have been little more than skirmishes because supermarkets have feared that a full-blown price-cutting campaign would harm their profits; it seems that now they are left with no alternative if they want to get us through their doors.

Aldi, (which claims to be at least 20% cheaper than the four leading supermarkets), has been trying to poach more Asda shoppers by highlighting wine and olives.

Paul Foley, its UK managing director, said:

“For those who need a store with piped music, a choice of 42 yoghurts and who can’t pack their own shopping bag, then perhaps Aldi’s not for them. But for those who want a guaranteed quality at low prices, then the current economic climate simply makes Aldi an even more obvious choice.”

So, is the price battle about supermarkets trying to help us in our time of need, or are they just desperate to keep their customer base?

What do you think?

It could be said that power companies are operating a 'stitch-up' especially when the UK's gas and electricity prices are rising at the fastest rate in Europe.

Not so long ago we mentioned the possibility of a 35% rise in energy prices...

Now the energy suppliers are threatening yet another round of price rises that could see bills climb by a total of 46% this year alone!

Now Energywatch, the official consumer body, has gone so far as to accuse power companies of effectively rigging the market against customers.

Energywatch chief executive Allan Asher said the big six power companies are on course to collect £6 billion in what he described as unearned profits in the next few years.

He told MPs the industry is exploiting consumers and using immoral tactics. He also accused the firms of being bloated and inefficient, with the result that as many as 30% of our bills are calculated wrongly.

• Power companies in short supply

These companies not only sell heat and light but are also responsible for producing or importing 80% of all our gas and electricity.

Mr. Asher said this has created a 'comfortable oligopoly' with the result that there is a price gap of only £30 a year between the cheapest and most expensive firm based on a dual fuel contract.

• Penalizing the poor?

Mr. Asher said the 5.8 million households who have prepayment meters 'have to pay punitively higher prices' and added: 'Why is it that pre-payment meter customers are paying up to £400 a year more for the identical commodity? This is an immoral premium.'

• Under investigation

He said he was especially alarmed that the power companies are getting fat on profit by tying their gas prices to the spiraling oil prices, which have reached record levels (it is now at $135 a barrel).

Mr. Asher believes this 'toxic' link means that annual bills for heat and light are £400 a year higher than they need to be. He said this means the UK market was 'stitched-up' with the result that prices in Britain are rising faster than anywhere else in Europe. 'It makes a mockery of saying we have a competitive and healthy market,' he declared.

He said the notion that there was competition in the industry was a complete myth, saying;

'There is a lot of pretence of competition, but it doesn't amount to good companies winning and bad companies losing. They really don't feel the need to innovate or compete. Sadly, consumers are the losers. Consumers are getting in the neck.'

If you think that power companies are stitching you up, then maybe its time you switched energy supplier?

Use the impartial Energyhelpline comparison site.

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£225m to help 100,000 households with their fuel bills

There is a rumour going around that gas & electricity price hikes of are predicted for the summer or autumn.

Frankly, that's not great news especially as it wasn't very long ago that energy prices were hiked up!

Certain analysts have been predicting that domestic energy bills are set to rise between 10%, and a more likely, 25% over the next 12 months. Some even suggest the rises might be as high as 35% (but we really hope not!)

Such a move would add another £180-190 to your standard average household bill, pushing it towards the £1,200 a year mark for the first time.

Now, the gas and electricity supplier npower (remember their New Year price hike?) has just withdrawn its cheapest online dual fuel tariff. Analysts say that is further evidence that all of us across the UK can start planning for yet another round of energy price increases.

Npower's Sign Online 10 tariff had been the cheapest joint gas and electricity deal in the market, and was aimed at customers switching supplier. Npower's new version of the same online tariff is around £83 a year more expensive than the one it replaced!

And with crude oil prices hovering around $120 a barrel (which is almost double the price of a year ago) wholesale gas and electricity prices have also been pushed upwards.

An npower spokesman commented on their move: "We don't really talk about the online tariffs which can be withdrawn at any time. There are no plans to increase the price for any of our other tariffs at the moment."

If the energy prices do rise as much as rumours suggest, grab a price capped tariff now, as it should save you some money; though the cheapest capped tariffs cost 10% more than the current cheapest uncapped tariffs.

For those of you with finances on the edge you should think about capping your energy prices as it provides surety. Yes you could wait, but when price rises start, caps disappear quickly; so it's a balance.

To find the cheapest, select the capped options on comparison sites.

Our top pick for an energy comparison service is Energyhelpline.

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How to fight the energy rip offs

Did you know that energy providers are profiting from your confusion when you move home?

No? Well then, you need to read on...

Those lovely folks at Fool.co.uk have unearthed a crafty tactic by utility companies that traps you when you move into your new home.

It affects 2.4 million households, which unwittingly waste £70 million a year because many of you innocently sign up to your utility provider's expensive 'deemed tariff'.

• Deemed tariff is typically 25% more expensive than the cheapest offer
• Utilities bills in homes go onto a deemed tariff after the final meter reading
• 2.4 million home movers a year risk paying deemed-tariff rates

Around 11% of us move home every year, which means that 2.4 million households are automatically put onto deemed tariffs. A deemed tariff is the standard quarterly tariff, which is typically 25% more expensive than the cheapest offer available from the same supplier!

While switching to a cheaper supplier can be requested when you take over a property, it can take up to four weeks for the billing process to be transferred.

So, with combined utility bills costing around £1,400 a year for a typical three-bedroom house, you homeowners are collectively spending 25% or £70 million unnecessarily because you have signed up to a deemed tariff. (This assumes you switch to cheaper tariffs within a month).

You need to be aware that when you move out of your house and terminate your utility accounts with a final meter reading, the property instantly switches to a default deemed tariff!

If you are new occupier taking over a property, you are obliged to contact the supplier to register the property in your name. But by so doing, you inadvertently sign up to the deemed tariff; and the longer you wait, the greater the amount of money you have wasted!

David Kuo, Head of Personal Finance at Fool.co.uk, said:

"Moving house is an expensive exercise. And the expense in moving can be made more costly if consumers unsuspectingly sign up to penal energy tariffs.

"New occupants should not delay in switching away from deemed tariffs, even if it means transferring to a monthly direct-debit tariff with the same lender first. The longer you wait, the longer you will be on the most expensive tariff.

"It can be easy to forget that you are on a deemed tariff when there are so many other things to remember at the time of moving house. But putting it onto the back-burner could burn a hole in your finances."

• When you move in, register the gas and electricity in your name on monthly direct debit immediately
• Note down meter readings the minute you step over the threshold
• Ask the supplier about consumption levels at the new property
• Compare providers to identify the best deals
• Review providers as soon as you have real consumption data

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£42 per day; the cost of family bills

This deal has been agreed between the Government and the UK's six biggest energy companies to help certain households with their energy bills.

The "Big Six" (British Gas, E.On, Scottish Power, Scottish & Southern, EDF, and npower) have agreed to boost their collective annual spending on social assistance programmes by £225m over the next three years, in a deal brokered by Energy Secretary John Hutton.

John Hutton hopes to eradicate fuel poverty with the move, as it could address the needs of up to 100,000 homes who can't afford to heat their homes.

A home is judged to be in fuel poverty if 10% or more of the household income is spent on energy bills.

Mr Hutton was quoted as saying "I do not underestimate the difficulties and anxiety that rising energy prices can cause but I believe that this extra cash, coupled with ensuring we have the most competitive market possible, will help us toward our goal of eradicating fuel poverty in the UK."

The government does already pay winter fuel payments of up to £250 for over-60s, and up to £400 for over-80s. However, this does not heavily impact the younger & poorer households in the UK.

Earlier in the week, Friends of the Earth and Help the Aged said they were taking legal action against the government for not doing enough to end "the misery of fuel poverty".

If you are struggling with energy bills NOW then there are other ways of reducing your monthly expenditure. These include...

• Fitting alternative sources of energy to your home to supplement your usage – e.g. solar panels, for which you can get generous grants to install.
• Reducing and being focused about your usage – e.g. reducing the temperature by only a couple of degrees on your thermostat, boiling just enough water for your need, turning items off that are in rooms not in use, etc.
• The final way, and some would say the easiest, is to find out if you can save money just by switching supplier!

Uswitch Energy Calculator Energy Calculator – find out what you can trim off your bills today.

Uswitch link for saving on EVERYTHING – includes heating cover, loans, broadband, current accounts, water, car insurance, etc