Cost of living

The cost of living crisis is impacting every corner of the UK. Rising food, energy and petrol prices are pushing inflation higher and many households up and down the country are experiencing a drop in living standards.

Centre for Cities ongoing work analyses how the cost of living crisis is playing out and proposes short term and long term policy solutions to support the people and places affected.

Our cost of living tracker maps city-by-city inflation and wage figures to visualise where inflation is hitting hardest and how prices and wages are rising across cities and large towns.

 

 

What is driving the cost of living crisis? 

Two key factors driving the cost of living crisis across cities and large towns are: energy consumption and petrol consumption.  

Domestic energy costs are linked to the nature and quality of housing stock. Energy inefficient dwellings (i.e. those that fall below EPC band C) tend to be more expensive to run and so are forcing a tighter squeeze on household finances.  

Vehicle usage, and by extent spending on petrol, also play into the equation. Households that are more reliant on cars to travel are more vulnerable to soaring fuel prices.  

Back to top

How is the cost of living playing out geographically?

While the national picture is clear, a lot less is known about how the cost of living is playing out in cities and large towns across the UK. Centre for Cities research shows there is a clear geography to the crisis, which is deepening inequalities across Britain and worsening the North-South divide. Cities outside the South are suffering higher rates of inflation and tighter squeezes on household finances.

How is the cost of living crisis calculated? 

Centre for Cities’ new cost of living tracker, tracks city-by-city inflation and wage figures to monitor where inflation is hitting hardest, how prices and wages are rising across cities and large towns, and the impact of mounting prices on money in workers pockets. 
Back to top

Where is the cost of living highest? 

Our research has shown that many of the cities and towns facing higher inflation rates are in the North, Midlands, and Wales. As of August 2022, Burnley and Blackpool have the highest inflation rates at 11.2% and 10.8% respectively. This is followed by Glasgow, Bradford and Blackburn at 10.7%. 

Back to top

Where is the cost of living lowest?

At the other end of the spectrum, cities and large towns in the South, particularly in the Greater South East, have been relatively sheltered from rising costs. As of August 2022, places with the lowest inflation include London, Reading and Cambridge at 8.7%, 8.8% and 9.2% respectively.
Back to top

Is the Government’s current cost of living support package enough?  

In early September 2022, the Truss Government announced the Energy Price Guarantee (EPG), outlining that typical household energy prices will be capped at £2,500 a year for the next two years.

While this will partially shelter households from soaring energy costs, it will have an uneven impact across the country due to the North-South divide of energy needs.

This follows on from the £15bn support package put forward by the Johnson Government at the end of May 2022.

Given the crisis has worsened, this package is increasingly inadequate, and, as called for by Centre for Cities, should offer more targeted support toward the people and places that need it most.

Back to top

What can be done to tackle the cost of living crisis? 

To tackle the cost of living crisis in the short term, the Government should support people’s immediate spending needs by: 

  • Increasing benefits now to bring them in line with inflation;  
  • Reintroducing the £20 uplift for Universal Credit; 
  • Providing a one-off payment for people living in energy inefficient homes.   

There are also a number of medium to long term policy interventions that would help to mitigate inflationary shocks from happening in the future, such as accelerating the retrofit agenda and encouraging general economic growth to counter soaring costs. 

Back to top

Our work on the cost of living crisis

Showing 1–7 of 7 results.

Cost of living tracker

The UK is in the grip of a cost of living crisis, and there is a clear North-South divide in how it is playing out across the country. Explore the latest data for your city or large town.

Data 15 Sep 2022