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Poor 'experience worse inflation'

New research from the Institute for Fiscal Studies shows that poorer households have experienced higher inflation on average than richer households over the past decade.

This difference has been especially marked since 2008 (during the recession) when the poorest fifth of households faced an average annual inflation rate of 4.3% whilst the richest fifth experienced a rate of just 2.7%.

People on lower incomes spend more of their money on gas, electricity and food, which have risen sharply. In 2009, the poorest 20% of households spent 9.4% of their incomes on household fuel, while the richest 20% spent only 4.4%.

At the same time, people with higher incomes have benefited more from lower mortgage rates.

Pensioners have experienced higher inflation than non-pensioners and pensioners relying on state benefits have been hit particularly hard.

Read more from the BBC.

Download the research from the Institute for Fiscal Studies.

Find out more about poverty and inequality in London's Poverty Profile.

Posted on 14 June 2011