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UK gripped by cost-of-living crisis
Forecasts of a troubling winter for UK families have come to pass, according to research
Michelle Highman Chief executive, The Money Charity
Worrying indicators for the UK’s fi nances have come into full eff ect over December and January with households facing soaring bills, according to our February 2022 Money Statistics,. Forecasts of a challenging winter for
household budgets have come to fruition in the early months of 2022. With the infl ation rate (CPI) at 5.5% (the highest level since 1992), the UK has seen soaring energy, fuel and food prices. The Bank of England increased the base
rate from 0.25% to 0.5% on 3 February 2022 to try and control infl ation. However, many people in the UK are currently experiencing a worsening cost of living crisis, with reports of households having to cut back on essentials such as groceries and telephone bills. Increasing rents across the UK are another
indicator of this crisis. Northern Ireland (5.0%), the East Midlands (3.6%) and the South West (3.5%) saw the highest rates of
Many people in the UK are currently experiencing a worsening cost of living crisis, with reports of households having to cut back on essentials such as groceries and telephone bills
increase in private rental prices in January 2022. Whilst London saw the lowest rate of increase at 0.1%, private renters in London continue to face the most expensive rental payments in the country, with the median monthly private rent 54.8% higher than the UK median. For the 18.5% of households now living in homes that are privately rented, rental payments
are often the most signifi cant outgoing. Low- income households living in privately rented homes spent an average of 56.4% of their income on rent. Fuel prices have also been a major recent
driver of the overall price increases being felt by UK consumers. While prices have now fallen for a second month in a row, the rate of reduction in price appears to be slowing. In January 2022, the average price of unleaded petrol fell by 0.4ppl to 145.7ppl with diesel falling by 0.6ppl to 149.0ppl.
Cost of living The cost-of-living crisis that we are currently experiencing is really concerning, testing the Financial Resilience of households across the UK to the extreme. More and more people are being forced
to borrow money to aff ord essentials and to cover regular bills, let alone to be able to deal with and recover from unexpected fi nancial shocks.
Striking numbers 3 million more people in the UK are now claiming Universal Credit than at the start of the pandemic (4.1). 1 million adults in the UK went an entire day without eating over the past month be- cause they could not aff ord to put a meal on the table (4.1). A fi fth of UK households struggled to pay their TV, internet and phone bills over the past year (4.1). 400,000 more people are now classed as ‘economically inactive’ than at the start of the pandemic (4.1). CCR
March 2022
www.CCRMagazine.com 23 In Focus
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