Updated on February 11, 2024
The cost of living in the United Kingdom saw a notable increase in 2021 and 2022. In October 2022, the yearly inflation rate hit 11.1%, the highest in 41 years, before gradually easing. This rise has significant effects on the affordability of everyday items, affecting households throughout the country.
UK Cost of Living Changes 2024
Recent data from December 2023 reveals that the annual inflation rate was at 4.0%, a slight uptick from November’s 3.9% but a decrease from the peak of 4.6% in October. This small increase is mainly attributed to a rise in tobacco duty.
It’s crucial to understand that even though the inflation rate has decreased, prices remain higher compared to the previous year. For example, if the annual inflation rate drops from 10% to 5%, it signifies that prices are still 5% higher than the year before.
Predictions indicate a ongoing decrease in the inflation rate throughout 2024, albeit at a slower rate than in 2023. This expectation is linked to lower energy prices and a decrease in inflation for consumer goods and food items.
The reasons behind the high inflation rates are complex, influenced by both global and domestic factors. Initially, international factors like increased global demand for consumer goods due to the COVID-19 pandemic, disruptions in the supply chain, and rising energy prices—intensified by geopolitical tensions such as Russia’s invasion of Ukraine—played significant roles.