The Cost of Living Crisis 2023

cost of living crisis

Currently, a significant portion of the UK is struggling to deal with the cost of living in 2023. This could only be the start of a rough year for the UK population.

A survey conducted in March by ONS (Office for National Statistics) showed that 17% of the population are borrowing more and anticipate that they will be saving less.

Additionally, nearly half of the population (43%) believe that they will not be able to save money over the next year. 

On top of this, 23% of those in the survey said that it was either difficult or very difficult to pay their typical household bills from the previous month compared to the year before.

What’s to blame?

The main culprits appear to be: 

  • The UK’s rate of inflation reached a staggering 7% in March according to the Office for National Statistics. 
  • The energy price cap increased by 54% on April 1st.
  • The National Insurance rise by 1.25 points that occurred on the 6th of April. 

Considering the current rate of inflation, we know prices for food, fuel and other essentials have become crippling to the UK population. Energy prices have increased drastically and less money is being taken home annually due to the energy price cap and national insurance figures. Therefore more people will be pushed into financial distress. 

Who will this crisis affect the most?

The ONS were quick to state, “While rising household bills will affect most households across the country, they are more likely to disproportionately affect those in the most deprived areas”.

As more information is published every day, we can see that the cost of living crisis will be detrimental financially, physically and mentally. In April, it was reported that 2 million went a day without food because they could not afford food.

The Food Foundation found that 13.8% of households experienced food insecurity in April. The last time these figures were so high was during the beginning of the pandemic, which was due to food scarcity as a result of people’s panic buying. This time it is instead related to the current financial state of the population.   

The crisis has reportedly got to such a dire state that food banks are requesting that they receive food that doesn’t need a cooker or needs to be stored in a freezer. This is due to those who need food banks being the same people that will struggle with their energy bills. 

Mortgage rates increased

Since The Bank of England raised the base rate from 0.75% to 1% on the 5th of May around 2 million will have to pay higher monthly repayments on their mortgage. TSB, Barclays, Santander and Nationwide have stated they will be changing their rates. This increase in mortgage repayments could further cripple those struggling with the current living cost crisis.

Andrew Bailey, The Bank of England Governor hopes that this will help bring down inflation in the coming years – it aims to keep it at 2%. If not, it could first reach 10% by Christmas. Which will affect much more of the population.

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