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Overview

The cost of living has been rising in recent months in the UK and across the world.

Food and energy prices have been rising markedly over the past year, particularly gas prices, largely in response to the conflict in Ukraine. Global recovery from the coronavirus (COVID-19) pandemic is putting further pressure on prices.

In the UK, the price of consumer goods and services rose at the fastest rate in four decades in the year to October 2022. The annual inflation rate rose from 8.8% to 9.2% between January and February 2023. This is lower than the recent peak of 9.6% but remains at highs previously seen around 30 years ago.

You can use our Personal Inflation Calculator to see how rising prices are affecting what you spend your money on.

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Housing: Rising rent and mortgage costs leave households struggling

More than a third of British adults paying rent or a mortgage say these costs have risen in the last six months, and around a third also say that they are struggling to afford them.

Some 36% of adults making rent or mortgage payments said that these outgoings had increased in the last six months. This was according to our latest public opinions and social trends survey carried out between 8 and 19 March 2023.

That is an increase of 7 percentage points from 29% when we first asked this question between 3 and 14 November 2021.

Around a third (34%) of those making rent or mortgage payments also reported that they were finding it very or somewhat difficult to afford them. This was compared with 32% in the previous survey period (22 February to 5 March 2023).

Read more about the cost of living and housing

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Spending: Discount store sales help boost retail spending in February

Retail sales volumes (the amount bought in shops) rose by 1.2% across Great Britain in February 2023, following a rise of 0.9% in January.

However, these are down 3.5% on the same month last year, as volumes sold fell throughout 2022.

The amount sold in non-food stores saw a rise of 2.4% in the month because of strong sales in discount department stores.

Food store sales volumes rose 0.9% in February 2023, which may be because of reduced spending in pubs and restaurants as people eat in more because of cost of living pressures.

While the amount bought in retail stores returned to pre pandemic February 2020 levels in the latest month, the amount spent was 16.8% higher.

Read more about the cost of living and spending

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Food: Prices of food and non-alcoholic drinks rising at fastest rate in 45 years

The prices of food and non-alcoholic drinks rose at the fastest rate in more than 45 years in the 12 months to February 2023.

The largest contributor to the rise in food inflation was vegetables, which rose by 18.0% in the year to February 2023 compared with 15.5% in January.

There have been media reports of shortages of salad produce and other vegetables, reportedly because of bad weather in southern Europe and Africa, and the impact of higher electricity prices on produce grown out of season in greenhouses in the UK and northern Europe.

Prices are also rising at record pace in restaurants and cafés, where the annual inflation rate was 11.4% in the year to February 2023, up from 9.4% in January 2023. This came from price rises for alcohol served in restaurants, cafes, and pubs.