British adults reporting a cost of living increase 2021-2024

In December 2024, 56 percent of households in Great Britain reported that their cost of living had increased in the previous month, compared with 45 percent in late July. Although the share of people reporting a cost of living increase has generally been falling since August 2022, when 91 percent of households reported an increase, the most recent figures indicate that the Cost of Living Crisis is still ongoing for many households in the UK. 

Crisis ligers even as inflation falls

Although various factors have been driving the Cost of Living Crisis in Britain, high inflation has undoubtedly been one of the main factors. After several years of relatively low inflation, the CPI inflation rate shot up from 2021 onwards, hitting a high of 11.1 percent in October 2022. In the months since that peak, inflation has fallen to more usual levels, and was 3.4 percent in February 2024. Since June 2023, wages have also started to grow at a faster rate than inflation, albeit after a long period where average wages were falling relative to overall price increases. 

Economy the main issue heading into an election

While there is as yet no set date for the next UK general election, it is widely expected to take place in the second half of 2024, and must be held by January 2025 at the latest. Heading into this election, the economy has consistently been selected as the main issue for voters over the last two years. Although the ruling Conservative Party was seen by voters as the best party for handling the economy before September 2022 this perception collapsed following the market's reaction to Liz Truss' mini-budget. Even after changing their leader from Truss to Rishi Sunak, the Conservatives have continued to fall in the polls, and are look likely to lose the next election despite some signs the UK is over the worst of the Cost of Living Crisis.