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How inflation has affected prices, and when it will end

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How inflation has affected prices, and when it will end


This year will be remembered for the rising energy prices and inflation, and the record-breaking decline in household incomes. Millions of people in the UK will struggle to maintain a reasonable standard of living this winter. Inflation may drop back in the middle of 2023 or could take longer and return to the levels we saw in previous years until 2024.

This report published by the Statista Research Department (https://www.statista.com/topics/6500/the-british-economy/#dossierContents__outerWrapper), shows us how much a single working adult needed to reach the minimum standard of living in 2021 and 2022. In 2021, a single working adult needed £231.33 per week. This increased in 2022 by 26.8%, making the new minimum standard of living £293.28. The increase has affected many different expenses an average person in the UK has, such as; fuel, clothing, food, and drink, travel, household costs, and their social life and activities. A car would cost an average of £13.50 a week to run in 2021, but in 2022 it costs a massive £30.97, which is a 129% increase.

The Office for National Statistics posted an article, which tracks the prices of the lowest-cost grocery items, and compares them to prices since April 2021. The research is based on data collected from supermarkets, which compares the cost of 30 everyday items. Their data shows that the lowest-priced grocery items have increased by 17% in the 12 months leading to September 2022. Of 30 items, 4 decreased in price, but another 15 items increased by 15% or more between September 2021 and September 2022. The grocery item that increased in price the most was vegetable oil, which increased by 46%. On the other hand, orange juice showed a price decrease of 8%.

The Office for National Statistics offers a free-to-use inflation calculator, that can be used to track what you spend your money on to see how inflation has impacted the cost. Click here to use the calculator, https://www.ons.gov.uk/visualisations/dvc1833/calculator/index.html.

Once the recent increase in energy prices begins to drop and is used as a base for comparison, household disposable incomes will start to improve as the new minimum standard of living will begin to drop. This improvement could happen in the middle of 2023, but there is also a possibility that the cost of living improves in 2024.

Many different outcomes could impact the cost of living by 2024. If Russia continues its conflict with Ukraine, we could see tighter enforcement of sanctions which will affect Russian energy. The UK could recover sooner though if a great winter budget is put in place to improve the lives of many people across the United Kingdom.


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