What is Inflation?

Inflation is when the price of an item increases over time and the cost of living becomes more and more expensive.

Inflation will mean than the worth of a £1 decreases the more inflation goes up and this is why it becomes difficult to maintain a standard of living when prices go up overall.

High inflation means prices are rising quickly and low inflation means prices are rising slowly over time.

So despite Inflation rates falling, unfortunately your weekly shops won't cheaper, the supermarkets are experiencing a decrease in inflation and prices are still rising but slower than before.

There are many causes of inflation including rising productions costs and rising wages.

For Example…

If a carton of orange juice cost £1 and then a year later the same orange juice cost £1.05 this would be an inflation rate of 5%.

When inflation happens this means that you could have £50 to buy a new microwave, but if you wait a year to buy it you could need £60 to buy the same microwave as the prices have increased and your money needs to be stretched further.

 

Who is most affected by inflation?

ONS reported that those on a lower income will experience higher than average inflation rates and will be more affected by the high food and energy costs than those from a higher income household.

In a survey from February and March 2024, it was found that 46% of adults reported an increased cost of living compared to previous months.

Trussell Group food charity found they had provided 1.5, emergency food parcels in April-September of 2023 which is a record for that period,

Citizens advice reveal that in February 2024 they had helped 46,640 people with debt advice.