The UK is experiencing its most significant fall in living standards since 1956, driven by a persistent cost-of-living crisis that began in 2021.
Consumer Price Index (CPI) rose over 10% year-on-year in July 2022, with real household disposable income per capita projected to fall by 3.7% in 2022/23. This has led to a noticeable shift in consumer behavior, with three-quarters of UK adults attempting to reduce spending.
Discretionary spending on items like dining out and new clothes has been cut, replaced by a focus on essentials and a move towards cheaper retail options. Savings are being depleted, and borrowing, particularly on credit cards, has increased significantly.
Low-income households are disproportionately affected, facing rising debts and difficulty paying bills, leading to increased demand at food banks, even from employed individuals. Concerns about job security are also rising, with many professionals considering job changes or taking on second jobs to cope with increased costs.
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