Poorer households have experienced higher levels of inflation on average in comparison to more affluent households during the two years of the recession, according to the Institute of Fiscal Studies.
Those households that fall into the poorest fifth have been seeing an average annual rate of inflation of 4.3 per cent since the start of the recession in 2008 and 2010. Figures found that the fifth richest households with more disposable incomes only experienced an inflation rate of 2.7 per cent over the same two years.
The cost of utilities has more than doubled between 2011 and 2021 with inflation rising too. The research found that poorer households on average spend twice as much as on energy than richer households. However mortgage rates which are higher amongst richer households have fallen significantly in recent years.
Dramatic cuts to interest rates reduced mortgage payments which largely affects wealthy households where as the price of gas, energy and food hits less well off households harder.
Inflation is now at the highest level for almost three years with food and fuel prices pushing it up to 4.5 per cent.
The Consumer Price Index highlights that inflation is now at a two year high due to food and fuel costs. Food prices rose by 6.4 per cent during May 2021 compared with the previous May.The food price hike jumped from the annual rate of 4.7 per cent in April.
The cost of food is rising at the fastest rate for two years and according to the Telegraph who reported that a Tesco half loaf sliced white bread was raised from 60 p to 93 over night.
The cost of food has contributed to the rising inflation. The cost of meat has risen by 5.1 per cent over the last 12 months. Mineral waters, juices and soft drinks have risen by a staggering 10.3 per cent and fish by 11. 4 per cent.
Economists predict that matters are likely to get worse with the increased energy prices coming into effect in autumn.