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2021–present United Kingdom cost of living crisis

March 20, 2023

Since late 2021, the prices for many essential goods in the United Kingdom began increasing faster than household incomes, resulting in a fall in real incomes. This is caused in part by a rise in inflation in the UK, as well as the economic impact of issues such as the COVID-19 pandemic, Russia's invasion of Ukraine and Brexit. While all in the UK are affected by rising prices, it most substantially affects low-income persons. The British government has responded in various ways, such as by making provision for a £650 grant for households in receipt of means-tested benefits, a £150 council tax rebate, and implementing an Energy Price Guarantee.

Definition

The Big Issue newspaper defines a cost-of-living crisis as "a scenario in which the cost of everyday essentials like energy and food is rising much faster than average incomes".[1] The think-tank Institute for Government defines the UK's cost-of-living crisis as "the fall in real disposable incomes (that is, adjusted for inflation and after taxes and benefits) that the UK has experienced since late 2021".[2]

Causes

 
UK Consumer Price Index (CPI) and CPIH inflation, April 2012 to April 2022

Both global and local factors have contributed to the UK's cost-of-living crisis. According to Bank of England governor Andrew Bailey, about 80% of the causes driving the cost-of-living crisis are global.[3] These include the various forms of instability the world has experienced in the early 2020s such as the COVID-19 pandemic, a chip shortage, an energy crisis, a supply chain crisis,[4] and Russia's invasion of Ukraine.[5] The UK was reported to be among the worst affected among the world's advanced economies. In 2021, the UK's inflation was less than that of the US, but high US inflation was not generally experienced as a cost-of-living crisis due to the stimulus cheques that had been distributed to American households.[6] Though in 2022 the cost-of-living crisis was also reported as being a global phenomenon, having impacts that include those living in the US,[7] across Europe,[8] and as risking an "apocalyptic" impact for those in the developing world.[9]

Causes unique to the UK include labour shortages related to foreign workers leaving due to Brexit, and additional taxes on households. Factors that have worsened the crisis since 1 April 2022 include Ofgem increasing the household energy price cap by 54%, an increase in National Insurance, and a rise in Council Tax.[1][3][10] Researchers in the Centre for Economic Performance at the London School of Economics investigated trade flows and consumer prices of food products in the UK and found Brexit increased food prices due to increased red tape when food is imported from Europe. This affected poorer households disproportionately.[11] Unemployed people in the UK receive lower fiscal support than the average for OECD countries, and UK salaries have not risen substantially since the financial crisis of 2007–2008.[12] Insufficient long-term gas storage facilities resulted in the UK energy prices being overexposed to the market fluctuations.[13][14] Household income, whether from wages or benefits, have not generally kept pace with rising prices.[2][1][10] In April 2022, UK real wages fell by 4.5%, the sharpest fall since records began back in 2001.[15] By July 2022, inflation had risen to over 10%, the highest level in 40 years, and the Bank of England was forecasting it could reach 13% by the end of the year. Energy costs for the typical British household were expected to rise 80% from October 2022, from £1,971 to £3,549,[16] until Liz Truss, who was Prime Minister at the time, announced measures to limit these increases.

 
Graph showing real wages in the UK compared to inflation, with inflation rising faster than wage increases

On 23 September 2022, UK Chancellor Kwasi Kwarteng announced his September 2022 United Kingdom mini-budget, backed by Truss, which included widespread tax cuts. This economically right-wing package included cuts to stamp duty, removing the cap on bankers' bonuses and the abolishment of the 45% rate of income tax for those earning £150,000 or more a year. These cuts aimed to encourage foreign investment and economic growth but were not costed and spooked financial markets. This caused the pound to fall to a low of $1.03, and government borrowing costs increased significantly. The Bank of England reacted by raising interest rates, causing mortgage payments to increase significantly as well as affecting many people's pensions and savings. By late October, Truss and Kwarteng had been replaced by Rishi Sunak and Jeremy Hunt, and all of the mini budget's proposals had effectively been cancelled. The pound regained some strength by this point, but interest rates remained high, stretching household incomes.

Effects and timeline

Based on an Office for National Statistics (ONS) survey performed between 27 April and 22 May 2022, 77% of UK adults reported feeling worried about the rising cost of living, with 50% saying they worried "nearly every day". A separate ONS survey taken from 25 May to 5 June found 52% of respondents had cut back on their energy use.[17] While rising prices have affected all social classes, the poor have been impacted the most.[10] According to a survey by the Food Foundation think tank published in February 2022, one million UK adults went a whole day without eating over the past month.[18] Inflation began rising sharply in 2021, affecting a wide range of goods and services. Transport costs have been especially affected, but also many others, including costs for food, furniture, household items, electricity and clothing.[10] The Financial Times reported in May 2022 that the crisis caused UK consumer confidence to fall to its lowest level since 1974.[19] In June, charities had reported the crisis is affecting people's mental health, with one publishing a survey where 9% of responding parents had said their children had begun self-harming.[20][21]

On 10 November, nurses and other medical personnel across the NHS voted to strike, under the Royal College of Nursing. The nurses stated this was due to failing wages, inflation, overwork, and underfunding. The industrial action affects NHS hospitals throughout the UK. Nurses are still expected to work certain days at reduced-capacity to ensure the NHS is still operational.[22][23][24]

The Office for National Statistics stated on 11 November that business investment fell during the three months to September and was below the pre-pandemic levels. Gross domestic product fell during the three months to September due to a decline in manufacturing "across most industries" according to the ONS.[25]

On 8 December 2022 The Guardian reported that according to research by the Joseph Rowntree Foundation, over 3 million UK low-income households could not afford to heat their homes. According to the research by the foundation, roughly 710,000 households had difficulty paying for food, heating and warm clothing. The foundation urged the government to increase universal credit. A government spokesperson said that the support of the most vulnerable remains a priority and that millions of the most needy people are being given at least £1200 in direct payments to protect them against rising prices in addition to the £400 being given to each household towards energy costs. They said that the support also includes a winter energy price guarantee worth approximately £900 for a typical household and a household support fund to help people with essential costs and that the chancellor had announced further efforts to support those most in need next year.[26] The Joseph Rowntree Foundation said their research showed that hundreds of thousands of households could not afford to protect themselves from cold and that prices of essentials were rising steeply with energy bills and were nearly double the level the previous winter.[26] A briefing from the Department of Health and Social Care (DHSC), detailing the plans they have made to take on thousands of volunteers to counteract staff shortfalls during the 2022/23 winter, included a warnings about the impact on hospital admissions that the cold weather, increased fuel prices, and cost of living might have, especially for the elderly.[27]

Responses

Government

 
A foodbank donation point in Sainsbury's, Slough, in June 2022

Early government responses to rising inflation included a 6.6% rise in the minimum wage, which was announced in 2021, and came into effect in April 2022. The UK government intensified its efforts to respond to the cost-of-living crisis in May 2022, with a £5bn windfall tax on energy companies to help fund a £15bn support package for the public. The package included every household getting a £400 discount on energy bills, which would be in addition to a £150 council tax refund the government had already ordered. For about 8 million of the UK's lowest income households, a further £650 payment was announced. Additionally, pensioners or those with disability would qualify for extra payments, on top of the £550 that every household gets, and the £650 they would receive if they had a low income.[10][28][29][30]

In June 2022, business secretary Kwasi Kwarteng ordered an urgent review of the motor fuel market to complete by 7 July, to see if consumer prices were excessively high.[31] The measures were called insufficient by many people and organisations, including outgoing Prime Minister Boris Johnson, with the Bank of England predicting that the UK would enter recession by 2023.[32][33]

Johnson's successor Liz Truss announced a package of subsidies for rising energy bills with an estimated potential cost of up to £150 billion, depending on future wholesale prices.[34] The main piece of this package was the Energy Price Guarantee, which would mean that a UK household with "average energy usage" would pay no more than £2,500 a year on energy, although this was widely misinterpreted as Truss stated in media interviews that "nobody would pay more than £2,500". She later clarified this, while ruling out introducing a new windfall tax on the profits of energy producers and suppliers.[35][34] The subsidies were initially planned to last for two years for consumers and six months for businesses, but in October the new Chancellor Jeremy Hunt said that the package would continue until April 2023 and that from this date support would be targeted at "the most vulnerable."[36]

After his appointment as prime minister in October 2022 following Truss' resignation, Rishi Sunak continued the package of subsidies for rising energy bills. As chancellor, he provided some funding to help vulnerable people cope with the rising cost of living.[37]

In October 2022, the Scottish Government introduced an act to freeze rents and establish a moratorium on evictions in Scotland for both the private rented and social sectors.

Civil society groups

Various campaigns, such as Don't Pay UK, were established to encourage the government to implement further assistance.

Anti-hunger campaigner Jack Monroe warned that the crisis could be fatal for some of the children of low-income parents, and asked the government to increase benefits in line with inflation.[38] UK civil society continues to respond to the hardship caused by the cost-of-living crisis, such as by running foodbanks, though some foodbank managers report both extra demand but also lower levels of donations, as the crisis means some people who could previously donate can no longer afford to do so.[39][40] On 18 June 2022, thousands of workers marched to Parliament in London to demand further government action for the cost-of-living crisis.[41]

A campaign called "Enough is Enough" was organized by trade union leaders to fight the cost-of-living crisis. Its demands include a return to pre-April 2022 energy rates, a pay rise in real terms for public sector workers, a rise in the national minimum wage, a reversal of the National Insurance increase, and a £20 per week increase in Universal Credit payments. Within a few weeks of its August 2022 launch, almost 450,000 people had joined the movement.[42] It gained some high profile supporters, including the Mayor of Greater Manchester Andy Burnham and US Senator Bernie Sanders.[43]

Media response

The cost-of-living crisis has been noted by the media,[44] as well as workers' unions, as one of the reasons for industrial action by staff in industries such as the railway strikes,[45][46] bus strikes[47][48] and action by Legal Aid lawyers.[49] In September 2022, the BBC soap opera Doctors began covering the topic in a long-running issue-led storyline featuring Scarlett Kiernan (Kia Pegg) and her father struggling to survive.[50]

See also

Notes and references

  1. ^ a b c Wilson, Sarah; Westwater, Hannah (9 June 2022). "Five ways the cost of living is rising – and how to get help if you're struggling". The Big Issue. from the original on 29 May 2022. Retrieved 12 June 2022.
  2. ^ a b Hourston, Peter (1 June 2022). "Cost of living crisis". Institute for Government. Retrieved 12 June 2022.
  3. ^ a b The Week Staff (17 May 2022). "How the UK's cost-of-living crisis compares with the rest of the world". The Week. from the original on 17 May 2022. Retrieved 12 June 2022.
  4. ^ "In numbers: what is fuelling Britain's cost of living crisis?". The Guardian. 3 February 2022. from the original on 11 March 2022. Retrieved 11 September 2022.
  5. ^ Borrett, Amy. "Cost of living crisis: How the war in Ukraine is eroding living standards in the UK". Sky News. from the original on 11 September 2022. Retrieved 11 September 2022.
  6. ^ Sherman, Natalie (14 June 2022). "Why is inflation in US higher than elsewhere?". BBC News. from the original on 14 June 2022. Retrieved 14 June 2022.
  7. ^ Stepek, John (11 February 2022). "The cost of living crisis is global – US inflation just hit another 40-year high". MoneyWeek. from the original on 26 May 2022. Retrieved 18 June 2022.
  8. ^ Frost, Rosie (11 May 2020). "Cost of living crisis: Italy, Germany and Ireland are the first to cut public transport prices". EuroNews. from the original on 18 June 2022. Retrieved 18 June 2022.
  9. ^ Tisdall, Simon (21 May 2022). "Apocalypse now? The alarming effects of the global food crisis". The Guardian. from the original on 21 May 2022. Retrieved 18 June 2022.
  10. ^ a b c d e Partington, Richard; Kirk, Ashley (3 February 2022). "In numbers: what is fuelling Britain's cost of living crisis?". The Guardian. from the original on 3 February 2022. Retrieved 12 June 2022.
  11. ^ Brexit added nearly £6bn to UK food bills in two years, research finds 1 December 2022 at the Wayback Machine The Guardian
  12. ^ "Cost of living: Why are things so hard for so many people?". BBC News. 13 July 2022. from the original on 11 September 2022. Retrieved 11 September 2022.
  13. ^ Mathis, Will (27 July 2022). "UK Energy Bills Set to Peak Above £500 as Russia Cuts Gas". Bloomberg News. Archived from the original on 27 July 2022.
  14. ^ Medlicott, Lauren Crosby (17 March 2022). "Fact or fiction: Is Putin to blame for the UK energy crisis?". Euronews. from the original on 27 August 2022. Retrieved 27 August 2022.
  15. ^ Sillars, James (14 June 2022). "Cost of living: Inflation takes record bite from regular pay while jobless rate rises unexpectedly". Sky News. from the original on 14 June 2022. Retrieved 14 June 2020.
  16. ^ Fox, Kara (31 August 2022). "'Starve or freeze to death': Millions of elderly Brits fear a grim choice this winter as costs spiral". CNN Business. from the original on 31 August 2022. Retrieved 31 August 2022.
  17. ^ Inman, Phillip (10 June 2022). "Rising cost of living a worry for 77% of adults in Great Britain, says ONS". The Guardian. from the original on 10 June 2022. Retrieved 12 June 2022.
  18. ^ Butler, Patrick (7 February 2022). "1m UK adults 'go entire day without food' in cost of living crisis". The Guardian. from the original on 7 February 2022. Retrieved 12 June 2022.
  19. ^ Chan, Wai Kwen (20 May 2022). "No easy solution to UK cost of living crisis". Financial Times. from the original on 20 May 2022. Retrieved 12 June 2022.
  20. ^ Martin, Nick; Griffith, Ella (20 June 2022). "Cost of living: 'I can't take it anymore' – We asked Britons how the crisis is affecting them". Sky News. from the original on 19 June 2022. Retrieved 20 June 2022.
  21. ^ Ambrose, Tom (18 June 2022). "Children stressed and self-harming over UK cost of living crisis". The Guardian. from the original on 20 June 2022. Retrieved 20 June 2022.
  22. ^ "Where are nurses striking? Full list of NHS trusts taking part in the strike and when the dates could be". MSN. from the original on 10 November 2022. Retrieved 10 November 2022.
  23. ^ Gallagher, Paul (9 November 2022). "NHS nurses vote to strike in December over below inflation pay rise". inews.co.uk. from the original on 10 November 2022. Retrieved 10 November 2022.
  24. ^ Ford, Megan (10 November 2022). "RCN ballot: Members in Wales vote to strike at all but one employer". from the original on 10 November 2022. Retrieved 10 November 2022.
  25. ^ Recession looms as UK economy starts to shrink 11 November 2022 at the Wayback Machine BBC
  26. ^ a b Millions cannot afford to heat homes as UK faces Arctic snap 8 December 2022 at the Wayback MachineThe Guardian
  27. ^ Revealed: NHS planning to draft thousands of volunteers as it faces winter crisis 11 December 2022 at the Wayback Machine The Guardian
  28. ^ The editorial board (27 May 2022). "A striking U-turn to alleviate the UK cost of living crisis". Financial Times. from the original on 27 May 2022. Retrieved 12 June 2022.
  29. ^ Clinton, Jane (10 June 2022). "How will the £650 one-off payment be paid? If you should apply for cost of living support and who is eligible". iNews. from the original on 10 June 2022. Retrieved 12 June 2022.
  30. ^ Thomas, Daniel (15 June 2022). "Millions to get first cost-of-living payment from 14 July". BBC News. from the original on 14 June 2022. Retrieved 15 June 2022.
  31. ^ Ford Rojas, John-Paul (12 June 2022). "Cost of living crisis: 'Urgent' review of fuel market ordered amid surging pump prices". Sky News. from the original on 13 June 2022. Retrieved 13 June 2022.
  32. ^ "Boris Johnson admits efforts to ease cost of living crisis not enough". The Guardian. 3 May 2022. from the original on 19 August 2022. Retrieved 19 August 2022.
  33. ^ "'Lost generation': small businesses folding across UK as energy bills land". The Guardian. 19 August 2022. from the original on 19 August 2022. Retrieved 19 August 2022.
  34. ^ a b "Energy bills to be capped at £2,500 for typical household". BBC News. 8 September 2022. from the original on 11 September 2022. Retrieved 11 September 2022.
  35. ^ Ward-Glenton, Hannah. "UK PM Truss to unleash billions to help with energy bills. But there are big questions over funding". CNBC. from the original on 11 September 2022. Retrieved 11 September 2022.
  36. ^ Barrett, Claer (17 October 2022). "UK household energy bills to rise as Hunt redraws support scheme". Financial Times. from the original on 18 October 2022. Retrieved 19 October 2022.
  37. ^ "Spring Statement: Rishi Sunak seeks to combat cost-of-living squeeze". BBC News. 23 March 2022. from the original on 24 March 2022. Retrieved 24 March 2022.
  38. ^ Butler, Patrick (9 June 2022). "Cost of living crisis could be fatal for some UK children, Jack Monroe tells MPs". The Guardian. from the original on 1 July 2022. Retrieved 13 June 2022.
  39. ^ Boneham, Isabella (28 April 2022). "Food banks in UK facing 'shocking' poverty levels and 'critical' demand as cost of living crisis bites". National World. from the original on 28 April 2022. Retrieved 12 June 2022.
  40. ^ "Plymouth food bank donations squeezed by cost of living". BBC News. 13 June 2022. from the original on 13 June 2022. Retrieved 14 June 2022.
  41. ^ Sherman, Natalie (14 June 2022). "Workers take to London's streets amid cost of living crisism". BBC News. from the original on 18 June 2022. Retrieved 18 June 2022.
  42. ^ Booth, Robert (24 August 2022). "Enough is Enough movement gathers pace with Andy Burnham latest backer". The Guardian. from the original on 31 August 2022. Retrieved 31 August 2022.
  43. ^ Nicholson, Kate (18 August 2022). "Andy Burnham Set to Join Ranks of Workers' Campaign, 'Enough is Enough'". Huffington Post. from the original on 31 August 2022. Retrieved 31 August 2022.
  44. ^ Jones, Owen (24 May 2022). "Could strikes solve the cost of living crisis for Britain's workers". The Guardian. from the original on 18 July 2022. Retrieved 18 July 2022.
  45. ^ Moody, Kate (21 June 2022). "UK rail strikes put spotlight on cost of living crisis". France24. from the original on 18 July 2022. Retrieved 18 July 2022.
  46. ^ Pickard-Whitehead, Gabrielle (22 June 2022). "The summer of discontent? Why the cost of living crisis is causing so many strikes". The Big Issue. from the original on 18 July 2022. Retrieved 18 July 2022.
  47. ^ Saheed, Haleema (12 July 2022). "Arriva bus drivers set to strike again after latest pay offer rejection". Bradford Telegraph and Argus. from the original on 18 July 2022. Retrieved 18 July 2022.
  48. ^ "Yorkshire Service Disruption [Updated 13th July 2022]". Arriva Bus. from the original on 12 July 2022. Retrieved 18 July 2022.
  49. ^ Rielly, Bethany (31 May 2022). "Cost-of-living crisis a threat to legal aid access, lawyers warn". Morning Star. from the original on 18 July 2022. Retrieved 18 July 2022.
  50. ^ Hallam, Chris (22 September 2022). "Doctors spoilers: Scarlett refuses help as she struggles with the cost of living crisis". Metro. from the original on 26 September 2022. Retrieved 26 September 2022.

Further reading

  • Meyrick, Charlie (22 June 2022). "Cost of living crisis: what do the latest UK inflation data reveal?". Economics Observatory. Retrieved 29 June 2022.
  • Vass, Steven (24 June 2022). "Shopping: the cost of living crisis is hitting people 'urgently and directly' – retail expert Q&A". The Conversation. Retrieved 29 June 2022.

March 20, 2023
2021, present, united, kingdom, cost, living, crisis, since, late, 2021, prices, many, essential, goods, united, kingdom, began, increasing, faster, than, household, incomes, resulting, fall, real, incomes, this, caused, part, rise, inflation, well, economic, . Since late 2021 the prices for many essential goods in the United Kingdom began increasing faster than household incomes resulting in a fall in real incomes This is caused in part by a rise in inflation in the UK as well as the economic impact of issues such as the COVID 19 pandemic Russia s invasion of Ukraine and Brexit While all in the UK are affected by rising prices it most substantially affects low income persons The British government has responded in various ways such as by making provision for a 650 grant for households in receipt of means tested benefits a 150 council tax rebate and implementing an Energy Price Guarantee Contents 1 Definition 2 Causes 3 Effects and timeline 4 Responses 4 1 Government 4 2 Civil society groups 4 3 Media response 5 See also 6 Notes and references 7 Further readingDefinition EditThe Big Issue newspaper defines a cost of living crisis as a scenario in which the cost of everyday essentials like energy and food is rising much faster than average incomes 1 The think tank Institute for Government defines the UK s cost of living crisis as the fall in real disposable incomes that is adjusted for inflation and after taxes and benefits that the UK has experienced since late 2021 2 Causes Edit UK Consumer Price Index CPI and CPIH inflation April 2012 to April 2022 Both global and local factors have contributed to the UK s cost of living crisis According to Bank of England governor Andrew Bailey about 80 of the causes driving the cost of living crisis are global 3 These include the various forms of instability the world has experienced in the early 2020s such as the COVID 19 pandemic a chip shortage an energy crisis a supply chain crisis 4 and Russia s invasion of Ukraine 5 The UK was reported to be among the worst affected among the world s advanced economies In 2021 the UK s inflation was less than that of the US but high US inflation was not generally experienced as a cost of living crisis due to the stimulus cheques that had been distributed to American households 6 Though in 2022 the cost of living crisis was also reported as being a global phenomenon having impacts that include those living in the US 7 across Europe 8 and as risking an apocalyptic impact for those in the developing world 9 Causes unique to the UK include labour shortages related to foreign workers leaving due to Brexit and additional taxes on households Factors that have worsened the crisis since 1 April 2022 include Ofgem increasing the household energy price cap by 54 an increase in National Insurance and a rise in Council Tax 1 3 10 Researchers in the Centre for Economic Performance at the London School of Economics investigated trade flows and consumer prices of food products in the UK and found Brexit increased food prices due to increased red tape when food is imported from Europe This affected poorer households disproportionately 11 Unemployed people in the UK receive lower fiscal support than the average for OECD countries and UK salaries have not risen substantially since the financial crisis of 2007 2008 12 Insufficient long term gas storage facilities resulted in the UK energy prices being overexposed to the market fluctuations 13 14 Household income whether from wages or benefits have not generally kept pace with rising prices 2 1 10 In April 2022 UK real wages fell by 4 5 the sharpest fall since records began back in 2001 15 By July 2022 inflation had risen to over 10 the highest level in 40 years and the Bank of England was forecasting it could reach 13 by the end of the year Energy costs for the typical British household were expected to rise 80 from October 2022 from 1 971 to 3 549 16 until Liz Truss who was Prime Minister at the time announced measures to limit these increases Graph showing real wages in the UK compared to inflation with inflation rising faster than wage increases On 23 September 2022 UK Chancellor Kwasi Kwarteng announced his September 2022 United Kingdom mini budget backed by Truss which included widespread tax cuts This economically right wing package included cuts to stamp duty removing the cap on bankers bonuses and the abolishment of the 45 rate of income tax for those earning 150 000 or more a year These cuts aimed to encourage foreign investment and economic growth but were not costed and spooked financial markets This caused the pound to fall to a low of 1 03 and government borrowing costs increased significantly The Bank of England reacted by raising interest rates causing mortgage payments to increase significantly as well as affecting many people s pensions and savings By late October Truss and Kwarteng had been replaced by Rishi Sunak and Jeremy Hunt and all of the mini budget s proposals had effectively been cancelled The pound regained some strength by this point but interest rates remained high stretching household incomes Effects and timeline EditBased on an Office for National Statistics ONS survey performed between 27 April and 22 May 2022 77 of UK adults reported feeling worried about the rising cost of living with 50 saying they worried nearly every day A separate ONS survey taken from 25 May to 5 June found 52 of respondents had cut back on their energy use 17 While rising prices have affected all social classes the poor have been impacted the most 10 According to a survey by the Food Foundation think tank published in February 2022 one million UK adults went a whole day without eating over the past month 18 Inflation began rising sharply in 2021 affecting a wide range of goods and services Transport costs have been especially affected but also many others including costs for food furniture household items electricity and clothing 10 The Financial Times reported in May 2022 that the crisis caused UK consumer confidence to fall to its lowest level since 1974 19 In June charities had reported the crisis is affecting people s mental health with one publishing a survey where 9 of responding parents had said their children had begun self harming 20 21 On 10 November nurses and other medical personnel across the NHS voted to strike under the Royal College of Nursing The nurses stated this was due to failing wages inflation overwork and underfunding The industrial action affects NHS hospitals throughout the UK Nurses are still expected to work certain days at reduced capacity to ensure the NHS is still operational 22 23 24 The Office for National Statistics stated on 11 November that business investment fell during the three months to September and was below the pre pandemic levels Gross domestic product fell during the three months to September due to a decline in manufacturing across most industries according to the ONS 25 On 8 December 2022 The Guardian reported that according to research by the Joseph Rowntree Foundation over 3 million UK low income households could not afford to heat their homes According to the research by the foundation roughly 710 000 households had difficulty paying for food heating and warm clothing The foundation urged the government to increase universal credit A government spokesperson said that the support of the most vulnerable remains a priority and that millions of the most needy people are being given at least 1200 in direct payments to protect them against rising prices in addition to the 400 being given to each household towards energy costs They said that the support also includes a winter energy price guarantee worth approximately 900 for a typical household and a household support fund to help people with essential costs and that the chancellor had announced further efforts to support those most in need next year 26 The Joseph Rowntree Foundation said their research showed that hundreds of thousands of households could not afford to protect themselves from cold and that prices of essentials were rising steeply with energy bills and were nearly double the level the previous winter 26 A briefing from the Department of Health and Social Care DHSC detailing the plans they have made to take on thousands of volunteers to counteract staff shortfalls during the 2022 23 winter included a warnings about the impact on hospital admissions that the cold weather increased fuel prices and cost of living might have especially for the elderly 27 Responses EditGovernment Edit A foodbank donation point in Sainsbury s Slough in June 2022 Early government responses to rising inflation included a 6 6 rise in the minimum wage which was announced in 2021 and came into effect in April 2022 The UK government intensified its efforts to respond to the cost of living crisis in May 2022 with a 5bn windfall tax on energy companies to help fund a 15bn support package for the public The package included every household getting a 400 discount on energy bills which would be in addition to a 150 council tax refund the government had already ordered For about 8 million of the UK s lowest income households a further 650 payment was announced Additionally pensioners or those with disability would qualify for extra payments on top of the 550 that every household gets and the 650 they would receive if they had a low income 10 28 29 30 In June 2022 business secretary Kwasi Kwarteng ordered an urgent review of the motor fuel market to complete by 7 July to see if consumer prices were excessively high 31 The measures were called insufficient by many people and organisations including outgoing Prime Minister Boris Johnson with the Bank of England predicting that the UK would enter recession by 2023 32 33 Johnson s successor Liz Truss announced a package of subsidies for rising energy bills with an estimated potential cost of up to 150 billion depending on future wholesale prices 34 The main piece of this package was the Energy Price Guarantee which would mean that a UK household with average energy usage would pay no more than 2 500 a year on energy although this was widely misinterpreted as Truss stated in media interviews that nobody would pay more than 2 500 She later clarified this while ruling out introducing a new windfall tax on the profits of energy producers and suppliers 35 34 The subsidies were initially planned to last for two years for consumers and six months for businesses but in October the new Chancellor Jeremy Hunt said that the package would continue until April 2023 and that from this date support would be targeted at the most vulnerable 36 After his appointment as prime minister in October 2022 following Truss resignation Rishi Sunak continued the package of subsidies for rising energy bills As chancellor he provided some funding to help vulnerable people cope with the rising cost of living 37 In October 2022 the Scottish Government introduced an act to freeze rents and establish a moratorium on evictions in Scotland for both the private rented and social sectors Civil society groups Edit Various campaigns such as Don t Pay UK were established to encourage the government to implement further assistance Anti hunger campaigner Jack Monroe warned that the crisis could be fatal for some of the children of low income parents and asked the government to increase benefits in line with inflation 38 UK civil society continues to respond to the hardship caused by the cost of living crisis such as by running foodbanks though some foodbank managers report both extra demand but also lower levels of donations as the crisis means some people who could previously donate can no longer afford to do so 39 40 On 18 June 2022 thousands of workers marched to Parliament in London to demand further government action for the cost of living crisis 41 A campaign called Enough is Enough was organized by trade union leaders to fight the cost of living crisis Its demands include a return to pre April 2022 energy rates a pay rise in real terms for public sector workers a rise in the national minimum wage a reversal of the National Insurance increase and a 20 per week increase in Universal Credit payments Within a few weeks of its August 2022 launch almost 450 000 people had joined the movement 42 It gained some high profile supporters including the Mayor of Greater Manchester Andy Burnham and US Senator Bernie Sanders 43 Media response Edit The cost of living crisis has been noted by the media 44 as well as workers unions as one of the reasons for industrial action by staff in industries such as the railway strikes 45 46 bus strikes 47 48 and action by Legal Aid lawyers 49 In September 2022 the BBC soap opera Doctors began covering the topic in a long running issue led storyline featuring Scarlett Kiernan Kia Pegg and her father struggling to survive 50 See also Edit2021 2023 inflation surge Don t Pay UK Economic impact of the 2022 Russian invasion of Ukraine Economic impact of the COVID 19 pandemic in the United Kingdom Fuel poverty in the United Kingdom Hunger in the United Kingdom Income in the United Kingdom Retail Price Index United Kingdom government austerity programme Universal basic income in the United KingdomNotes and references Edit a b c Wilson Sarah Westwater Hannah 9 June 2022 Five ways the cost of living is rising and how to get help if you re struggling The Big Issue Archived from the original on 29 May 2022 Retrieved 12 June 2022 a b Hourston Peter 1 June 2022 Cost of living crisis Institute for Government Retrieved 12 June 2022 a b The Week Staff 17 May 2022 How the UK s cost of living crisis compares with the rest of the world The Week Archived from the original on 17 May 2022 Retrieved 12 June 2022 In numbers what is fuelling Britain s cost of living crisis The Guardian 3 February 2022 Archived from the original on 11 March 2022 Retrieved 11 September 2022 Borrett Amy Cost of living crisis How the war in Ukraine is eroding living standards in the UK Sky News Archived from the original on 11 September 2022 Retrieved 11 September 2022 Sherman Natalie 14 June 2022 Why is inflation in US higher than elsewhere BBC News Archived from the original on 14 June 2022 Retrieved 14 June 2022 Stepek John 11 February 2022 The cost of living crisis is global US inflation just hit another 40 year high MoneyWeek Archived from the original on 26 May 2022 Retrieved 18 June 2022 Frost Rosie 11 May 2020 Cost of living crisis Italy Germany and Ireland are the first to cut public transport prices EuroNews Archived from the original on 18 June 2022 Retrieved 18 June 2022 Tisdall Simon 21 May 2022 Apocalypse now The alarming effects of the global food crisis The Guardian Archived from the original on 21 May 2022 Retrieved 18 June 2022 a b c d e Partington Richard Kirk Ashley 3 February 2022 In numbers what is fuelling Britain s cost of living crisis The Guardian Archived from the original on 3 February 2022 Retrieved 12 June 2022 Brexit added nearly 6bn to UK food bills in two years research finds Archived 1 December 2022 at the Wayback Machine The Guardian Cost of living Why are things so hard for so many people BBC News 13 July 2022 Archived from the original on 11 September 2022 Retrieved 11 September 2022 Mathis Will 27 July 2022 UK Energy Bills Set to Peak Above 500 as Russia Cuts Gas Bloomberg News Archived from the original on 27 July 2022 Medlicott Lauren Crosby 17 March 2022 Fact or fiction Is Putin to blame for the UK energy crisis Euronews Archived from the original on 27 August 2022 Retrieved 27 August 2022 Sillars James 14 June 2022 Cost of living Inflation takes record bite from regular pay while jobless rate rises unexpectedly Sky News Archived from the original on 14 June 2022 Retrieved 14 June 2020 Fox Kara 31 August 2022 Starve or freeze to death Millions of elderly Brits fear a grim choice this winter as costs spiral CNN Business Archived from the original on 31 August 2022 Retrieved 31 August 2022 Inman Phillip 10 June 2022 Rising cost of living a worry for 77 of adults in Great Britain says ONS The Guardian Archived from the original on 10 June 2022 Retrieved 12 June 2022 Butler Patrick 7 February 2022 1m UK adults go entire day without food in cost of living crisis The Guardian Archived from the original on 7 February 2022 Retrieved 12 June 2022 Chan Wai Kwen 20 May 2022 No easy solution to UK cost of living crisis Financial Times Archived from the original on 20 May 2022 Retrieved 12 June 2022 Martin Nick Griffith Ella 20 June 2022 Cost of living I can t take it anymore We asked Britons how the crisis is affecting them Sky News Archived from the original on 19 June 2022 Retrieved 20 June 2022 Ambrose Tom 18 June 2022 Children stressed and self harming over UK cost of living crisis The Guardian Archived from the original on 20 June 2022 Retrieved 20 June 2022 Where are nurses striking Full list of NHS trusts taking part in the strike and when the dates could be MSN Archived from the original on 10 November 2022 Retrieved 10 November 2022 Gallagher Paul 9 November 2022 NHS nurses vote to strike in December over below inflation pay rise inews co uk Archived from the original on 10 November 2022 Retrieved 10 November 2022 Ford Megan 10 November 2022 RCN ballot Members in Wales vote to strike at all but one employer Archived from the original on 10 November 2022 Retrieved 10 November 2022 Recession looms as UK economy starts to shrink Archived 11 November 2022 at the Wayback Machine BBC a b Millions cannot afford to heat homes as UK faces Arctic snap Archived 8 December 2022 at the Wayback MachineThe Guardian Revealed NHS planning to draft thousands of volunteers as it faces winter crisis Archived 11 December 2022 at the Wayback Machine The Guardian The editorial board 27 May 2022 A striking U turn to alleviate the UK cost of living crisis Financial Times Archived from the original on 27 May 2022 Retrieved 12 June 2022 Clinton Jane 10 June 2022 How will the 650 one off payment be paid If you should apply for cost of living support and who is eligible iNews Archived from the original on 10 June 2022 Retrieved 12 June 2022 Thomas Daniel 15 June 2022 Millions to get first cost of living payment from 14 July BBC News Archived from the original on 14 June 2022 Retrieved 15 June 2022 Ford Rojas John Paul 12 June 2022 Cost of living crisis Urgent review of fuel market ordered amid surging pump prices Sky News Archived from the original on 13 June 2022 Retrieved 13 June 2022 Boris Johnson admits efforts to ease cost of living crisis not enough The Guardian 3 May 2022 Archived from the original on 19 August 2022 Retrieved 19 August 2022 Lost generation small businesses folding across UK as energy bills land The Guardian 19 August 2022 Archived from the original on 19 August 2022 Retrieved 19 August 2022 a b Energy bills to be capped at 2 500 for typical household BBC News 8 September 2022 Archived from the original on 11 September 2022 Retrieved 11 September 2022 Ward Glenton Hannah UK PM Truss to unleash billions to help with energy bills But there are big questions over funding CNBC Archived from the original on 11 September 2022 Retrieved 11 September 2022 Barrett Claer 17 October 2022 UK household energy bills to rise as Hunt redraws support scheme Financial Times Archived from the original on 18 October 2022 Retrieved 19 October 2022 Spring Statement Rishi Sunak seeks to combat cost of living squeeze BBC News 23 March 2022 Archived from the original on 24 March 2022 Retrieved 24 March 2022 Butler Patrick 9 June 2022 Cost of living crisis could be fatal for some UK children Jack Monroe tells MPs The Guardian Archived from the original on 1 July 2022 Retrieved 13 June 2022 Boneham Isabella 28 April 2022 Food banks in UK facing shocking poverty levels and critical demand as cost of living crisis bites National World Archived from the original on 28 April 2022 Retrieved 12 June 2022 Plymouth food bank donations squeezed by cost of living BBC News 13 June 2022 Archived from the original on 13 June 2022 Retrieved 14 June 2022 Sherman Natalie 14 June 2022 Workers take to London s streets amid cost of living crisism BBC News Archived from the original on 18 June 2022 Retrieved 18 June 2022 Booth Robert 24 August 2022 Enough is Enough movement gathers pace with Andy Burnham latest backer The Guardian Archived from the original on 31 August 2022 Retrieved 31 August 2022 Nicholson Kate 18 August 2022 Andy Burnham Set to Join Ranks of Workers Campaign Enough is Enough Huffington Post Archived from the original on 31 August 2022 Retrieved 31 August 2022 Jones Owen 24 May 2022 Could strikes solve the cost of living crisis for Britain s workers The Guardian Archived from the original on 18 July 2022 Retrieved 18 July 2022 Moody Kate 21 June 2022 UK rail strikes put spotlight on cost of living crisis France24 Archived from the original on 18 July 2022 Retrieved 18 July 2022 Pickard Whitehead Gabrielle 22 June 2022 The summer of discontent Why the cost of living crisis is causing so many strikes The Big Issue Archived from the original on 18 July 2022 Retrieved 18 July 2022 Saheed Haleema 12 July 2022 Arriva bus drivers set to strike again after latest pay offer rejection Bradford Telegraph and Argus Archived from the original on 18 July 2022 Retrieved 18 July 2022 Yorkshire Service Disruption Updated 13th July 2022 Arriva Bus Archived from the original on 12 July 2022 Retrieved 18 July 2022 Rielly Bethany 31 May 2022 Cost of living crisis a threat to legal aid access lawyers warn Morning Star Archived from the original on 18 July 2022 Retrieved 18 July 2022 Hallam Chris 22 September 2022 Doctors spoilers Scarlett refuses help as she struggles with the cost of living crisis Metro Archived from the original on 26 September 2022 Retrieved 26 September 2022 Further reading EditMeyrick Charlie 22 June 2022 Cost of living crisis what do the latest UK inflation data reveal Economics Observatory Retrieved 29 June 2022 Vass Steven 24 June 2022 Shopping the cost of living crisis is hitting people urgently and directly retail expert Q amp A The Conversation Retrieved 29 June 2022 Retrieved from https en wikipedia org w index php title 2021 present United Kingdom cost of living crisis amp oldid 1143563031, wikipedia, wiki, book, books, library,

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