Support 100 years of independent journalism.

  1. Chart of the Day
17 June 2022

Inflation will be far higher for the poorest Britons

Lower-income households are hit much harder by rises in gas and electricity bills.

By Ben Walker

The cost-of-living crisis was already being talked about as early as the second half of 2021. Even before the war in Ukraine, disrupted supply chains and shortages were affecting the cost of energy, leading to higher heating and transport costs, higher prices for goods, and an increased cost of food. The impact of these price rises, however, has not been equally spread.

Institute for Fiscal Studies analysis has found while yearly consumer price inflation will be 10 per cent across all households, the actual consumer price inflation experienced by those in the highest income bracket will be 8 per cent, while those earning the least will experience 14 per cent inflation in the prices of the goods and services they buy.

Many of the measures so far implemented to cope with the cost of living, such as the £400 energy bill grant, have been universal, but the IFS analysis makes it clear that the increases in gas and electricity prices have disproportionately hit less well-off households, which spend a higher proportion of their income on energy. It warns that further increases will only exacerbate this divide.

[See also: Bank of England interest rates: Is recession its only choice?]

Sign up for The New Statesman’s newsletters Tick the boxes of the newsletters you would like to receive. A weekly newsletter helping you fit together the pieces of the global economic slowdown. Quick and essential guide to domestic and global politics from the New Statesman's politics team. The New Statesman’s global affairs newsletter, every Monday and Friday. The best of the New Statesman, delivered to your inbox every weekday morning. The New Statesman’s weekly environment email on the politics, business and culture of the climate and nature crises - in your inbox every Thursday. Our weekly culture newsletter – from books and art to pop culture and memes – sent every Friday. A weekly round-up of some of the best articles featured in the most recent issue of the New Statesman, sent each Saturday. A newsletter showcasing the finest writing from the ideas section and the NS archive, covering political ideas, philosophy, criticism and intellectual history - sent every Wednesday. Sign up to receive information regarding NS events, subscription offers & product updates.

Content from our partners
“I learn something new on every trip"
How data can help revive our high streets in the age of online shopping
Why digital inclusion is a vital piece of levelling up
Topics in this article: ,