London Daily

Focus on the big picture.
Friday, Nov 06, 2026

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
High Court Rules in Favor of Comprehensive Transparency Review Regarding Government Artificial Intelligence Procurement Contracts
Home Office Expands Digital Border Security and Electronic Travel Authorization Systems Across International Arrivals
Scottish Government Confirms Accelerated Investment in Offshore Renewable Energy Infrastructure Across North Sea Corridors
Department for Environment Food and Rural Affairs Implements Stricter Water Company Oversight and Environmental Penalties
National Health Service England Unveils Emergency Winter Resilience Package to Tackle Acute Accident and Emergency Backlogs
Office for National Statistics Reports Gross Domestic Product Growth Stagnated at Zero Point One Percent in Third Quarter
Chancellor of the Exchequer Outlines Comprehensive Fiscal Strategy to Stabilize National Borrowing and Public Spending
Bank of England Maintains Base Interest Rate at Five Percent Amid Persistent Service Sector Inflation Pressures
Office for National Statistics Reports Stable Consumer Confidence and Modest Retail Growth Heading into Winter
Welsh Government Launches Strategic Regional Transport Initiative to Modernize Rail Links Across South Wales
Home Office Expands Digital Border Security Controls and Electronic Travel Authorisations for Inbound Visitors
Scottish Government Announces Emergency Housing Investment Package to Tackle Urban Homelessness Crises
Northern Ireland Executive Reaches Bipartisan Consensus on Public Sector Pay Reform and Budget Allocations
Automotive Manufacturing Sector in the West Midlands Welcomes New Electric Vehicle Supply Chain Investments
Department for Energy Security and Net Zero Approves Offshore Wind Expansion in the North Sea
HM Treasury Finalizes Regulatory Framework for Stablecoins and Digital Asset Markets in London
National Health Service Unveils Comprehensive Digital Integration Strategy to Slash Hospital Waiting Lists
Bank of England Leaves Interest Rates Unchanged Amid Persistent Wage Growth and Inflationary Pressures
United Kingdom and Caribbean Nations Agree to Establish Formal Diplomatic Dialogue Following Reparations Discussions
Cambridge University Appoints Senior Barrister to Lead Independent Review into Death of Academic Jason Arday
Historic Hastings Castle and Kent Dickens Chalet Added to National Heritage at Risk Register Amid Deterioration Concerns
Incoming British Ambassador to Japan Calls for Deepened Bilateral Cooperation on Artificial Intelligence and Semiconductors
Milburn Review Urges Employment Revolution to Unlock Workforce Opportunities for Young Disabled Britons
British Healthcare Worker Evacuated from Democratic Republic of Congo to United Kingdom Following Ebola Exposure
United Nations Refugee Agency Criticises Government Proposal for Thirty-Year Earned Settlement Pathways for Asylum Seekers
Parliamentary Inquiry Warns United Kingdom Remains Exposed to Chinese Critical Mineral Dependencies
Bank of England Prepares Interest Rate Decision as Inflation Pressures Prompt Expectation of Four Percent Benchmark
Department for Business and Trade Overhauls Protection Standards for Digital Animation and Moving Image Files
Intellectual Property Office Introduces Thirty-Month Grace Period for International Product Launches
Intellectual Property Office Targets Anti-Competitive Filings With New Powers to Verify Novelty Before Registration
Creative Industries Minister Ian Murray Praises Regulatory Reforms to Safeguard Small Businesses and Micro-Enterprises
Government Unveils Major Design Framework Overhaul to Protect British Creators and Boost Economy
Global Asset Management Reports Surge in British Dividend Payouts Driven by Strong Financial and Mining Sectors
HM Treasury Confirms Strongest Group of Seven Growth Figures as Fiscal Consolidation Plans Progress
Department for Energy Security and Net Zero Approves Construction of New North Sea Offshore Wind Hub
Northern Ireland Executive Finalizes Public Sector Pay Agreements Following Months of Inter-Agency Negotiations
Welsh First Minister Eluned Morgan Secures Cross-Party Support for Regional Clean Energy Infrastructure Bill
Competition and Markets Authority Launches Formal Investigation Into Dominant Artificial Intelligence Cloud Partnerships
United Kingdom Foreign Secretary David Lammy Concludes High-Level Diplomatic Mission to Washington and Ottawa
Scottish Government Announces Emergency Housing Investment Package to Address Escalating Urban Homelessness
Chancellor Rachel Reeves Finalizes Corporate Tax Adjustments Ahead of Upcoming Business Investment Summit
National Health Service England Unveils Emergency Winter Resilience Plan to Combat Projected A&E Overcrowding
Bank of England Monetary Policy Committee Votes to Hold Base Interest Rate Steady at Four Point Seven5 Per Cent
UK Gross Domestic Product Expands by Zero Point Four Per Cent in Third Quarter Driven by Resilient Services Growth
Northern Ireland Executive Agrees on Multi-Year Public Sector Pay Restructuring Framework at Stormont
Department for Transport Confirms Acceleration of Electric Vehicle Charging Infrastructure Rollout Along Strategic Motorways
Welsh Government Announces Emergency Funding Package to Support Agricultural Sector Facing Severe Weather Impacts
High Court Rules in Favor of Environmental Coalition Over Government Carbon Reduction Plan Deficiencies
Office for National Statistics Reports Stable Retail Sales Growth Supported by Strong Digital Commerce Volumes
Scottish First Minister John Swinney Secures Cross-Party Support for Renewable Energy Export Expansion
×