The Resolution Foundation stated today (Wednesday) in response to new ONS inflation figures that although inflation rose marginally in May, rising gas costs will generate a larger increase in June, and low-income people continue to experience the highest cost-of-living pressures.
CPI inflation grew from 9 to 9.1%, while CPIH inflation jumped from 7.8 to 7.9%, mostly due to home services (such as rising energy bills), transportation expenses, and food prices, the latter of which has caused the 12-month inflation rate to surge 9.9 percentage points over the last year (going from -1.3 to 8.6 per cent).
The Foundation emphasises that due to these inflationary factors, poorer households face a greater inflation rate than wealthier ones.
According to their calculations, the headline inflation rate for the lowest tenth of families is around 10.3%, while it is 8.7% for the richest tenth.
Since comparable data began at the beginning of the 2000s, this 1.6% cost-of-living disparity is the greatest it has ever been.
The average price of gasoline was 165.9 pence at the time of the most recent inflation data collection, but it is currently 186.9 pence.
This will put inflation back on an upward trend the following month.
Jack Leslie, Senior Economist at the Resolution Foundation, said: “The latest inflation is worryingly high, but will feel low for consumers as it predates the big spike in petrol prices over the past month.
“With inflation also being driven by rising energy bills and food prices, poorer households are experiencing the greatest cost-of-living pressures, with their own inflation rate already in double digits.
“This is why the Chancellor was right to prioritise vulnerable families in his latest cost-of-living support via additional means-tested flat-rate payments, and is right to uprate benefits in line with this September’s inflation next year.
“With the economic outlook so unclear, no-one one knows how high inflation could go, and how long it will continue for – making fiscal and monetary policy judgements particularly tough.”
