Five charts that explain the high cost of living in the UK
Summary
The UK is facing a rising cost of living, with inflation at 2.8% in June. Higher energy prices caused by conflict in the Middle East have made petrol, heating, and other goods more expensive, affecting lower-income households the most.Key Facts
- Inflation in the UK was 2.8% in June, down slightly from 3% in May.
- Energy prices increased due to the Strait of Hormuz closure, which affects global oil and gas supply.
- Petrol prices in the UK rose by 22% and diesel by 27% between late February and mid-August.
- The average UK household spends about £677 a week, with major costs in housing, fuel, transport, and food.
- Lower-income households spend less overall but feel price rises more sharply since essentials take a bigger part of their budget.
- Around 7.4 million low-income UK families struggle to afford basic needs, the highest since 2021.
- Compared to other G7 countries, the UK’s inflation rate is in the middle range, behind the US but ahead of Germany, France, and Japan.
- Inflation in the UK is influenced mainly by energy costs, service prices like restaurants and hotels, and slow wage growth.
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