Living costs rise faster for the least well-off

FULLY BOOKED Bruce Springsteen POOR households have been hit by higher inflation than richer ones this year, research has found.

The Resolution Foundation thinktank said living costs since January have been driven up by higher housing, food and drink prices.

These hammer poorer families more than most, with food and nonalcoholic drink gobbling up an average 18 per cent of their weekly spend, compared to nine per cent for the richest fifth of households.

The foundation say as a result, the poorest 10 per cent saw inflation rise more than two per cent between January and June but it was less than 1.8 per cent for the wealthiest. It marks a reverse from the second half of 2016 when the rising cost of fuel – which takes up a bigger chunk of wealthy households’ budgets – meant their inflation rate was higher.

Falling fuel prices contributed to a bigger than expected slowdown in inflation last month, the Office for National Statistics said yesterday.

The consumer price index, which measures prices year on year, dropped from 2.9 per cent to 2.6 per cent – but experts warn it could be a temporary blip. At 2.6 per cent, inflation is still outstripping wage growth, which averaged 1.8 per cent in the three months to May.

Stephen Clarke, policy analyst at the Resolution Foundation, said: “The small fall in inflation is good news for struggling households, though with average pay growth barely hitting two per cent, pay packets will continue to shrink for the rest of the year at least.”

TUC general secretary Frances O’Grady said: “The Government must stop this cost-of-living squeeze. Many working people are caught in a vice as rising prices crush their pay.”

Unite assistant general secretary Gail Cartmail said: “This slight fall in inflation is a cruel illusion that will be snatched at by desperate Cabinet Ministers trying to paint that everything is rosy with the British economy.”