Poorer households fare worst

The latest inflation figures for November show that the rise in the Retail Prices index (RPI) was down to a five-year low of 2.0% from 2.3% in October.

Falling food and fuel prices were the main factors in the fall.

Under the government’s preferred measure — the Consumer Prices Index (CPI) — the inflation rate was down to 1.0% from 1.3% the previous month.

In a further analysis of CPI inflation, the Office for National Statistics (ONS) suggested that some groups of the UK population “have faced relatively strong headwinds in recent years, eroding both their real incomes and their capacity to spend”. UK households with the lowest expenditure faced the fastest cost of living rise over the past 12 years, the ONS found. The rate of inflation experienced by lower-spending households has averaged 3.3% a year over the 2003-14 period, compared with 2.3% a year for the higher-spending households.

Meanwhile, using income as a parameter, the rate of inflation experienced by the lowest income households has averaged 2.7% a year compared with 2.4% a year for those around two-thirds of the way up the income distribution.

Households without children, and pensioner households, also experienced faster price increases in their typical basket of goods, the ONS said.

www.ons.gov.uk/ons/rel/elmr/variation-in-the-inflation-experience-of-uk-households/2003-2014/index.html

www.ons.gov.uk/ons/rel/cpi/consumer-price-indices/november-2014/stb---consumer-price-indices---november-2014.html