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.
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.
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.
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.
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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%.
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.
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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.
To tackle the cost of living crisis in the short term, the Government should support people’s immediate spending needs by:
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.
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The recently announced package to tackle the energy crisis is welcome but like previous measures, it does not address the existing North-South divide in energy needs.
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.
The geography of the cost of living crisis persists, with cities and large towns in the North most impacted by soaring costs.
This report sets out what the cost of living crisis is, what is driving it, and how the squeeze on disposable incomes is likely to be felt across the UK’s cities and largest towns.
Andrew Carter is joined by Valentine Quinio and Guilherme Rodrigues to unpack the findings of their latest report looking at the UK’s cost of living crisis.
There is a clear North-South divide in the current cost of living crisis. This is partially explained by lower income levels outside the South of England but there are also local factors driving this.
The cities more likely to receive payments to deal with the cost of living crisis tend to be poorer and have higher energy needs