London Daily

Focus on the big picture.
Friday, Nov 14, 2025

UK's rich and poor face similar inflation - but different economic pain

UK's rich and poor face similar inflation - but different economic pain

Britain's rich and poor alike are experiencing surges in inflation, official data showed on Friday, although soaring food and energy prices mean low-income households stand less chance of avoiding the hit from rising prices.

Consumer prices rose in annual terms by 5.4% last month, the highest rate in almost 30 years - making inflation a hot political topic. Some campaigners say the latest figure understates the true cost increases faced by the poorest families.

New figures published by the Office for National Statistics suggest both low- and high-income households face similar inflation to the headline rate - although the analysis was unable to take account of changed spending patterns during the pandemic or differences in the quality of food bought.

The ONS said low-income households experienced annual consumer price inflation of 5.3% in December, while high-income households faced inflation of 5.5%. The data showed there has been little to separate the two groups since 2014.

UK inflation by income

However, analysts said inflation for poorer Britons could overtake that of their richer peers this year.

"While the new ONS figures confirm that the average inflation rates experienced by different income groups are currently similar, they also highlight again how low income families experience inflation in a different way," said Jack Leslie, an economist at the Resolution Foundation think tank.

He said rising food prices and the prospect of a hike in Britain's household energy price cap in April would hurt the lowest-income families most, given they spend twice as much on food and domestic bills as a proportion of their income.

"These families should be the priority for the government's cost of living crisis response," Leslie said.

Easing the impact of April's higher energy bills for poorer households would cost at least 2.5 billion pounds ($3.4 billion), the think tank has calculated.

EXPENSIVE ESSENTIALS


A Reuters analysis of household spending data suggests that the inflation faced by low-income households is skewed towards essential spending on food and shelter, leaving them less able to adapt to increases in those prices.

In its latest report, the ONS said the slightly higher inflation rate for well-off households in December reflected their greater spending on transport.

The surging price of petrol and new and used cars - which comprise a far greater share of spending for high-income households - have been the biggest drivers of inflation over the last year.

Restaurant meals have been another big driver of inflation for high-income households.

While better-off households can spend less on eating out and delay replacing cars during a cost-of-living crisis, the inflation data last week showed a deteriorating picture for basic food and shelter costs.

Food prices rose by 1.4% in December alone, the biggest rise for nine years. Prices of meat, vegetables and bread and cereals each jumped by more than 2% in month-on-month terms.

Actual rents - where spending is skewed heavily towards the lowest income households - hit 2% in annual terms in December, the biggest rise since 2016.

The ONS defined a high-income household as one with after-tax income that is in the top 20% but not the top 10%, and a low-income household as one with an income in the bottom 20% but not the bottom 10%, when adjusted for household size.

In recent weeks social campaigner and writer Jack Monroe has brought media attention to the way the ONS measures food prices.

She has argued that in attempting to capture a representative price for a given item - say a tin of baked beans - the ONS misses out big price moves in the cheapest tins which tend to be bought by the poorest households.

The ONS itself has acknowledged the limitations of its attempts to measure consumer prices, which is based on a basket of 700 types of goods and services from a wide range of suppliers, giving 180,000 pieces of price data each month.

It plans to use prices sent straight from supermarket checkouts - increasing the number of price data points to hundreds of millions - so it has inflation data on a wider range of goods within a particular category.

Friday's figures also reflect spending patterns for 2019, before the pandemic - something the ONS plans to rectify in new data in May.

($1 = 0.7457 pounds)

Newsletter

Related Articles

0:00
0:00
Close
UK Upholds Firm Rules on Stablecoins to Shield Financial System
Brussels Divided as UK-EU Reset Stalls Over Budget Access
Prince Harry’s Remembrance Day Essay Expresses Strong Regret at Leaving Britain
UK Unemployment Hits 5% as Wage Growth Slows, Paving Way for Bank of England Rate Cut
Starmer Warns of Resurgent Racism in UK Politics as He Vows Child-Poverty Reforms
UK Grocery Inflation Slows to 4.7% as Supermarkets Launch Pre-Christmas Promotions
UK Government Backs the BBC amid Editing Scandal and Trump Threat of Legal Action
UK Assessment Mis-Estimated Fallout From Palestine Action Ban, Records Reveal
UK Halts Intelligence Sharing with US Amid Lethal Boat-Strike Concerns
King Charles III Leads Britain in Remembrance Sunday Tribute to War Dead
UK Retail Sales Growth Slows as Households Hold Back Ahead of Black Friday and Budget
Shell Pulls Out of Two UK Floating Wind Projects Amid Renewables Retreat
Viagogo Hit With £15 Million Tax Bill After HMRC Transfer-Pricing Inquiry
Jaguar Land Rover Cyberattack Pinches UK GDP, Bank of England Says
UK and Germany Sound Alarm on Russian-Satellite Threat to Critical Infrastructure
Former Prince Andrew Faces U.S. Congressional Request for Testimony Amid Brexit of Royal Title
BBC Director-General Tim Davie and News CEO Deborah Turness Resign Amid Editing Controversy
Tom Cruise Arrives by Helicopter at UK Scientology Fundraiser Amid Local Protests
Prince Andrew and Sarah Ferguson Face Fresh UK Probes Amid Royal Fallout
Mothers Link Teen Suicides to AI Chatbots in Growing Legal Battle
UK Government to Mirror Denmark’s Tough Immigration Framework in Major Policy Shift
UK Government Turns to Denmark-Style Immigration Reforms to Overhaul Border Rules
UK Chancellor Warned Against Cutting Insulation Funding as Budget Looms
UK Tenant Complaints Hit Record Levels as Rental Sector Faces Mounting Pressure
Apple to Pay Google About One Billion Dollars Annually for Gemini AI to Power Next-Generation Siri
UK Signals Major Shift as Nuclear Arms Race Looms
BBC’s « Celebrity Traitors UK » Finale Breaks Records with 11.1 Million Viewers
UK Spy Case Collapse Highlights Implications for UK-Taiwan Strategic Alignment
On the Road to the Oscars? Meghan Markle to Star in a New Film
A Vote Worth a Trillion Dollars: Elon Musk’s Defining Day
AI Researchers Claim Human-Level General Intelligence Is Already Here
President Donald Trump Challenges Nigeria with Military Options Over Alleged Christian Killings
Nancy Pelosi Finally Announces She Will Not Seek Re-Election, Signalling End of Long Congressional Career
UK Pre-Budget Blues and Rate-Cut Concerns Pile Pressure on Pound
ITV Warns of Nine-Per-Cent Drop in Q4 Advertising Revenue Amid Budget Uncertainty
National Grid Posts Slightly Stronger-Than-Expected Half-Year Profit as Regulatory Investments Drive Growth
UK Business Lobby Urges Reeves to Break Tax Pledges and Build Fiscal Headroom
UK to Launch Consultation on Stablecoin Regulation on November 10
UK Savers Rush to Withdraw Pension Cash Ahead of Budget Amid Tax-Change Fears
Massive Spoilers Emerge from MAFS UK 2025: Couple Swaps, Dating App Leaks and Reunion Bombshells
Kurdish-led Crime Network Operates UK Mini-Marts to Exploit Migrants and Sell Illicit Goods
UK Income Tax Hike Could Trigger £1 Billion Cut to Scotland’s Budget, Warns Finance Secretary
Tommy Robinson Acquitted of Terror-related Charge After Phone PIN Dispute
Boris Johnson Condemns Western Support for Hamas at Jewish Community Conference
HII Welcomes UK’s Westley Group to Strengthen AUKUS Submarine Supply Chain
Tragedy in Serbia: Coach Mladen Žižović Collapses During Match and Dies at 44
Diplo Says He Dated Katy Perry — and Justin Trudeau
Dick Cheney, Former U.S. Vice President, Dies at 84
Trump Calls Title Removal of Andrew ‘Tragic Situation’ Amid Royal Fallout
UK Bonds Rally as Chancellor Reeves Briefs Markets Ahead of November Budget
×