Rising prices a bigger burden for low earners as inflation hits those spending least

 
Chris Papadopoullos
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Households in the lowest 10 per cent of spenders saw prices rise by 3.7 per cent (Source: Getty)

Households that spend the least and have lower disposable incomes have been hit harder by inflation over the past decade.

Households in the lowest 10 per cent of spenders saw prices rise by 3.7 per cent per year on average between January 2003 and October 2014, figures released yesterday by the Office for National Statistics (ONS) show.
Those in the top 10 per cent expenditure-wise saw inflation of only 2.3 per cent per year on average over the same period.
The consumer price index (CPI) – the main index used to measure in­flation – grew by 2.6 per cent per year on average over that time.
Most of the difference is due to lower-expenditure households’ great­er vulnerability to rising energy and food bills.
However, the ONS noted: “House­holds are likely to move between expenditure and income deciles through time, as their economic circumstances change. As a result, the number of households who consistently feature in a single decile may vary.”
A similar, but less pronounced, difference was seen among high- and low-disposable income groups.
Average annual inflation has been 2.9 per cent for the lowest 10 per cent of households in terms of disposable income.
It was 2.6 per cent for the highest 10 per cent of households.

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