Inflation Reaches 9% – But It's Even Higher For The UK's Poorest

This is the first time since this cost of living crisis began that there's been a significant disparity in inflation between income groups.
Inflation is causing growing concerns that portions of the population are being pushed into poverty
Inflation is causing growing concerns that portions of the population are being pushed into poverty
Xinhua News Agency via Getty Images

For the poorest households in the UK inflation rates have soared to 10.9% compared to an average of 9% for the rest of the country, according to new research.

The ONS confirmed that inflation in the UK has hit a 40-year high on Wednesday, but as the Institute for Fiscal Studies (IFS) claimed, for the poorest 10% of households, inflation is higher.

At 10.9%, it’s three percentage points higher than inflation rates for the richest decile.

The researchers explained: “Energy price rises are disproportionately hitting poorer households. The poorest households spend 11% of their total household budget on gas and electricity, compared to 4% for the richest households.”

National energy prices increased by 70% in the year leading up to April, triggered by energy regulator Ofgem’s decision to lift the cap on costs.

The regulator has estimated that the average household will now be paying almost £60 extra per month for gas and electricity, adding up to around £700 per year.

IFS also noted: “State benefits only increased by 3.1% in April. This means big real terms cuts to the living standards of many of the poorest households.”

“Continuing pressures, such as the war in Ukraine, are likely to push Ofgem’s October tariff cap, as well as other prices including food prices, even higher later this year,” the IFS’s research economist Heidi Karjalainen said.

“We are likely to be in a prolonged period during which poorer households are facing rates of inflation even higher than the headline figures would suggest.”

Earlier this week, Ofgem suggested implementing a new system where energy price hikes are reviewed every three months rather than every six. This did not go down well with the general public who are already struggling to pay the sky-rocketing bills.’s Martin Lewis revealed on Twitter that he “lost his rag” during a meeting with Ofgem because its decision would have “dire consequences” for consumers.

While this is a global crisis, the UK is particularly struggling due to both economic Covid recovery and managing Brexit.

Only a month ago, inflation was at a 30-year high when it was just 7%.

The temporary VAT cut for the hospitality sector has been cut too, meaning tax on meals out and hotel stays climbed from a rate of 12.5% to 20% this month.

For comparison, it was just 5% in April of last year.

These findings from the IFS reveal for the first time a disparity in terms of inflation across all income groups.

The number of people using food banks has subsequently risen too. According to The Guardian’s Hilary Osborne, Citizens Advice has already referred more than 750 people a day so far, just in May.

The government has been repeatedly accused of not doing enough to help in this emergency, with the Conservatives voting down a windfall tax on oil and gas companies on Tuesday evening.

However Downing Street maintains that it is doing all it can with various payments set out in the Spring Statement and its plan to cull 91,000 civil service jobs.


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