04/10: The squeeze on Britain’s living standards worsened last month, pushing the Cost of Living up after the increased cost of importing fuel, clothes and food raised inflation to 2.9%, from 2.6% in July.
Clothing and footwear, most of which is imported, jumped in price by 4.6% year on year after a sharp rise in the price of women’s clothing pushed the average price up by 2.4% between July and August. Fuel costs also rose with petrol prices jumping by 1.8 pence per litre.
The poorest fifth of households are spending almost twice as much of their income on food and clothing as the richest fifth of households. This makes the Cost of Living even more tight for struggling families.
"The Cost of Living in the UK has been incrementally rising during the last few years, and with inflation making real-term wages fall for the third year in a row, people are constantly looking for ways to make their money go further," said Xenios Thrasyvoulou, founder and CEO of online freelance marketplace PeoplePerHour (PPH).
The situation has been raising concerns, especially as the season moves towards holidays and Christmas. According to analysts Mintel, families will be tightening belts as more than a quarter of Brits admit they are financially worse off today than the same time in 2016. Money worries over Christmas are likely to hit the high street which is facing a bleak December with sales rising by less than 2% to £44.6 billion, Mintel warned.
Pay for Price of Living
It raised fears that households could go into the red as families borrow more cash or hammer credit cards so kids don’t miss out on Christmas. Richard Perks, director of retail research at Mintel, said: “The natural response to falling real incomes would be to cut back on spending. Added to the tough comparison against last year’s boom, retail sales would be expected to be lower this Christmas.”
Paywizard in the UK has a unique and specialised way of calculating Cost of Living. The website records what you are paying for everyday household goods, and stores this information alongside similar data from close to 100 countries. Comparisons can then be made between the price of living in various countries around the world, and also in relation to global salaries. You can find out if you pay more, or less, then average prices in different countries.