Two points:
1st of all, re baking, I always try to choose recipes low in eggs on a cost basis, and regularly substitute marg for butter, or choose recipes where oil is a possibility. I also tend to lower the sugar, on taste as much as cost grounnds; most recipes are too sweet. For example, I have a fantastic muffin book
www.amazon.co.uk/Muffins-Fast-Fantastic-Susan-Reimer/dp/0952885832/ref=sr_1_1?ie=UTF8&qid=1313932423&sr=8-1
which was recommended to me on moneysavingexpert.com, and never fails. All the muffins I cook from there require only 1 egg for LOADS and can use veg oil instead of butter, so are very, very cheap to make. I've never yet had a failure with any recipe from that book - the kids love them, and they freeze very well too.
Secondly, whilst I agree that prices have risen massively recently - eg Tesco's Value tortillas up by 100% in a few weeks, from 25p to 50p a pack; no longer deserving the 'Value' title. But I think that needs to be set in some historical context - I've just been reading a book, a family saga/autobiography going from the 1860's to the 1960's. What struck me was how incredibly expensive a lot of the consumer items we take for granted are- eg clothes were prohibitively expensive, so one would plough on for tears with the same increasingly threadbare coat because a relacement was impossible. BUT the author and her husband were able to save up for 1 year! and, as a 22-year-old teacher and new journalist, buy a large house in Hampstead! Her parents, a very poor minimum wage type couple, earned £2 a week, which = 24 shillings. So 1 shilling was roughly equivalent to £10 today (assuming a 40 hour week @ £6/hr). Their weekly rent on a house was only 6 shillings, giving a monthly rent of 24 shillings, eg equivalent to £240/month now. But who today can rent a house for so little?
It is sad that rather than the current generation becoming richer and having lots more disposable income, as earlier generations assumed, all that has happened is that non-essentials have become far cheaper, but essentials = roof over one's head, food and heating, have all stayed extortionate. Just the balance has swung away from food, relatively, and towards housing.
I'm sure that if my rent cost £240/month, I'd grumble a lot less if my food cost a bit more.