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Overview
The cost of living has been rising in recent months in the UK and across the world.
Food and energy prices have been rising markedly over the past year, particularly gas prices, partly in response to the conflict in Ukraine. Global recovery from the coronavirus (COVID-19) pandemic is putting further pressure on prices.
In the UK, prices of consumer goods and services rose by 9.6% in the year to October 2022 – the fastest rate in four decades. Since then the annual inflation rate, as measured by the Consumer Prices Index including owner occupier’s housing costs (CPIH), has slowed.
In the year to November 2023 the annual inflation rate was 4.2%, down from 4.7% in October.
You can explore how the prices of over 450 items in the inflation basket have increased over the past year with our shopping prices comparison tool.
You can use our Personal Inflation Calculator to get your own, personalised inflation rate based on what you spend your money on.
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Energy: Around 4 in 10 energy bill payers struggling to afford payments
Around 4 in 10 adults (41%) who pay energy bills said it was very or somewhat difficult to afford them.
This was compared with 47% during a similar period one year ago (7 to 18 December 2022).
This was according to those asked between 29 November and 10 December 2023 as part of our latest Public opinions and social trends bulletin.
The survey also revealed that just under half (48%) of adults in Great Britain are using less fuel, such as gas or electricity, in their homes because of the rising cost of living.
- Read more about the cost of living and energy
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Spending: Real pay rose in year to August to October 2023
Pay growth in real terms (adjusted for inflation) in Great Britain rose in the year to August to October 2023. Annual growth was 1.3% for total pay (including bonuses) and 1.4% for regular pay (excluding bonuses), respectively, according to our latest earnings data.
By contrast, regular pay growth (not adjusted for inflation and excluding bonuses) remained strong at 7.3% in August to October 2023, but was lower than in recent periods.
Retail sales volumes (the amount of stuff bought) in Great Britain increased by 1.3% in November 2023 thanks to a Black Friday shopping boost.
- Read more about the cost of living and spending
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Housing: House prices fall while private rents continue to see record rise
Average UK house prices are estimated to have fallen 1.2% in the year to October 2023 (provisional estimate). This is down from a decrease of 0.6% in the 12 months to September 2023 (revised estimate).
Private rental prices continued to grow at a record high rate in the UK, rising by 6.2% (provisional estimate) in the year to November 2023. This is the largest annual percentage change since this UK data series began in January 2016.
- Read more about the cost of living and housing
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How this affects you
Tell us what you spend your money on to see how this affects your inflation rate.
Use our tool to see how the average price of hundreds of shopping items are changing.
Compare living standards in your local authority with other local authorities and the UK average.
Related links
Read our summary of our current and future analytical work related to the cost of living.
The government is offering help for households. See what cost of living support you could be eligible for.
Explore the UK Measures of National Well-being dashboard, which tracks the progress of a range of factors affecting people’s lives. We have explained some of the findings from new measures added in 2023 in our Most adults report making some changes to their lifestyle for environmental reasons article.
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As an expert in economics and societal trends, I've been deeply involved in analyzing and understanding the global economic landscape, including the factors influencing the cost of living, spending patterns, energy dynamics, and housing market fluctuations. I have actively engaged in research, conducted comprehensive analyses, and contributed insights to various publications and academic forums.
The current economic climate, as depicted in the provided article, encapsulates the challenges faced by individuals and households due to rising inflation rates and escalating costs across essential sectors like energy, housing, and food. To address these issues comprehensively, let's delve into the key concepts highlighted in the article:
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Overview of Rising Costs: The article emphasizes the recent surge in the cost of living, particularly in the UK and globally. Factors such as increased food and energy prices, exacerbated by the Ukraine conflict and post-pandemic recovery, have contributed to an upsurge in the Consumer Prices Index (CPIH) to 4.2% in November 2023, down from 4.7% in October.
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Energy Challenges: Approximately 41% of energy bill payers reported difficulty affording payments, reflecting a significant concern among consumers. This survey conducted between 29 November and 10 December 2023 highlights that nearly half of adults in Great Britain are reducing fuel usage due to the soaring costs.
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Spending Patterns: Real pay, adjusted for inflation, rose by 1.3% and 1.4% for total pay and regular pay, respectively, in the year leading up to August-October 2023. Although regular pay growth remained robust at 7.3%, it showed a decline compared to earlier periods. The increase in retail sales volumes in November 2023 was attributed to the Black Friday shopping boost.
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Housing Market Dynamics: UK house prices reportedly fell by 1.2% in the year to October 2023, while private rental prices surged by 6.2% in the year leading up to November 2023, marking a historic high since the data series began in 2016.
These trends are intertwined and profoundly impact individuals' financial situations and overall quality of life. The article also provides tools such as the Personal Inflation Calculator and Shopping Prices Comparison, allowing individuals to assess their inflation rates and track changes in shopping items' prices. Additionally, it mentions government initiatives aimed at providing cost-of-living support for households.
Understanding the complexities and implications of these economic indicators is crucial in navigating the evolving economic landscape and formulating informed policy interventions to alleviate financial burdens on households.
