The wealthiest households suffered higher inflation of 5% in March, above the 3.9% rate for the poorest 10%, according to data released Thursday by the ONS
Britain’s richest households are bearing the brunt of stickier inflation and elevated interest rates, a reversal of earlier trends when the poorest was squeezed hardest.
The wealthiest households suffered higher inflation of 5% in March, above the 3.9% rate for the poorest 10%, as per data released Thursday by the ONS.
The figures show how the sharp cooling in energy and food inflation has eased the pressure on the finances of the worst off in Britain. The poorest spend a disproportionate amount of their incomes on these bills and were therefore hit harder when inflation surged following Russia’s conflict with Ukraine.
Easing pressure on finances may lift the mood of the poorest, many of whom backed the Conservatives in the 2019 election. Many “red wall” seats in the north of England are expected to switch back to Labour at the election on July 4 after a squeeze on living standards since the 2019 vote.
Meanwhile, the BoE’s struggle to stamp out sticky inflation is squeezing high income households by more. Rapid restaurant and hotel price hikes and high mortgage rates mean the richest are now suffering more from persistent inflationary pressures.
The Office for National Statistics figures use their Household Costs Indices, which are different from the benchmark CPI as they include changes in mortgage interest rates and other costs from buying property.
The figures therefore reveal the impact of 14 back-to-back interest rate hikes by the Bank of England for mortgage holders. Inflation was at 5.5% for this group after many refinanced at much higher mortgage rates, compared to just 3.3% for those who own outright and 4.6% for private renters.
The retired also had a much lower inflation rate than other groups at 3.4%.