UK inflation ‘similar’ for poorer and wealthier households, says ONS

Prices in British stores rose at “similar” levels in both poorer and wealthier households, official data on Friday showed, undermining claims that inflation was much higher among lower-income households.

National Bureau of Statistics eager to publish The experimental data is in response to criticism from food blogger and poverty activist Jack Monroe, who said the index “seriously underestimated“The reality of poor inflation.

The ONS said that it was only in 2008 and 2011 – when food and energy inflation was very high – that there were significant periods of markedly different inflation across households.

However, if the government doesn’t intervene, the energy price cap will be raised in April and energy bills could rise by nearly 50%, according to the institute, with higher inflation costs for poor households. Fiscal Research Think Tank.

In the ONS analysis, the statistical agency looked at the buying habits of poorer and wealthier households, as well as those in the middle of the income distribution, and calculated different inflation rates based on overall spending patterns.

The agency found that poorer households allocate more of their budget to food and energy, while wealthier households spend more on gas and non-essentials like restaurant meals and vacations.

Due to the current high cost of petrol, prices rose 26.8% in the year to December, while petrol prices rose 28.1% over the same period, with inflation “similar” across groups, according to the ONS.

“The inflationary experience of high-income households is driven by rising transportation costs, who spend a larger percentage of their spending than low-income households, for which housing-related costs are more of a factor,” it says.

The differences between groups were driven by differences in spending patterns, ONS noted that it used the same quotes collected for the 700 spending each month.

CPI Inflation YoY (%) Histogram shows similar household inflation across income distributions in December

The agency didn’t address the possibility of higher inflation on low-cost food, which Monroe said was at the heart of the problem for the poorest households.

However, retail experts say supermarkets are not abandoning large quantities of essential food items from their stores, although some have been changing the product lines offered in some stores.

Responding to Monroe’s claim that prices for many basic commodities have more than doubled, Steve Dresser, chief executive of consultancy Grocery Insight, said: “There’s no getting around that food prices are going to go up. … but they’re not rising at nearly the rate reported.”

The ONS reported that food prices rose 4.5% in December compared to a year earlier, below headline inflation of 5.4%, despite rapid price increases in recent months.

The statistics agency said it was working to further improve its inflation data and would release a new household cost index designed to better reflect households’ price experience.

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