Rising prices are affecting millions of households in the UK and around Europe. More and more families are struggling to pay their energy bills and purchase essential supplies such as food or medicine.
As energy bills are expected to go up even more in October, it is unlikely that the cost of living will become lower anytime soon.
Here we take a look at 5 areas where prices have been changing to help you understand the scale of the problem.
Rental costs in the UK have been on the rise with a 14% increase in London over the past year and more than 19% in Manchester. As for properties outside of London, rent is almost 11% higher than it was one year ago.
Because of that, living in bigger cities is becoming unaffordable for the most vulnerable individuals. Housing costs have also increased following an increase in council tax bills.
Food in the UK is becoming increasingly expensive, leaving the poorest families no choice but to turn to food banks. In recent months, more people than ever before have been coming to food banks. Data shows that grocery prices in the UK are rising at the fastest rate in eight years. Food price inflation reached 4.5%, which is the highest level since September 2013.
April 6 marked the beginning of the new 2022-23 tax year and the day most workers had to start paying a new tax: the health and social care levy. The government said that the levy will help them raise around £12 billion a year. Big portion of the money is supposed to go to NHS workers.
In March, rail fares increased by almost 4%, which was especially detrimental to people who rely on trains to commute to work. As families were already dealing with increasing food, rent, and energy prices, this change was an additional burden on them.
Wholesale energy prices keep going up and, to cover the costs of purchasing energy and supplying it, energy companies have no choice but to make their tariffs more expensive. In turn, families are spending more and more on their energy supply, something that they cannot live without.
Why is there a cost of living crisis?
As you are reading about all these things becoming increasingly expensive, you might be asking yourself what caused the crisis in the first place. The truth is that there are numerous factors that have been driving it. The main ones are:
Covid – the pandemic has caused economic slowdown not only in the UK but around the continent and across the world. Many industries have been devastated and now need to make up for all these months of not being able to operate.
Commodity prices – price of raw materials have been rising due to problems with transport and distribution, especially after the war in Ukraine has caused major disruptions
Weather – winter this year was particularly cold so the demand for gas was higher than usual. As more gas was used then, now countries around the world are facing shortages, which means higher prices.
These are just the main factors behind the crisis but the whole situation is complex, which means solving it is not easy. Nevertheless, governments should step up their game to protect their citizens from being pushed into extreme poverty.