Unveiling the Impact of Surging Inflation in the United Kingdom

Uncover the impact of rising inflation in the UK. Explore insights revealing perceptions and buying behavior amid the economic challenges.
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Like most of the world, the United Kingdom is grappling with a significant surge in inflation recently, deteriorating households’ purchasing power nationwide.

In October 2022, inflation in the UK peaked at 11.1%, the highest level in 41 years. This surge has been attributed to various factors, including disruptions in the global supply chain due to the war in Ukraine, policy decisions, and market forces, including bank interest rates.

Despite these difficulties, inflation in the UK has now moderated to 6.7%, a decrease from the 10.1% recorded during the same period last year, according to a September 2023 report by Britain’s Office for National Statistics. Additionally, the Bank of England projects a decline in the prices of goods, particularly for food and consumer items, with a further decline in inflation this year to around 4.5%, and further reductions anticipated in 2024. Lower energy, core goods, and food price inflation, as well as some dip in services inflation, are projected to account for this decline.

Given the current economic landscape, it is interesting to look at how inflation in the UK affects ordinary people. Standard Insights surveyed 365 people in the country to determine their perception of inflation in the UK, as well as their buying behaviour. Below, you can find the results and our analysis.

The Impact of Inflation in the UK

Inflation in the UK in recent years has had a notable impact on the cost of living for many of the general public, affecting the affordability of everyday goods and services. In our study, nearly 45% of respondents noted a moderate impact of inflation on their day-to-day expenses, while close to 30% expressed significant challenges in the current economic climate.

Meanwhile, 15.10% reported little to no impact on their financial situation, likely due to effective budgeting or alternative strategies. A minority of 10.10% felt entirely insulated from the effects of inflation.

Assessing the impact of inflation in the UK on citizens

On a positive note, British grocery inflation has fallen 9.7% in the four weeks to October 29, a drop from 11% in September and well below the all-time peak of 17.5% in March. This presents a much-needed relief for the British public and retailers, easing the burden on people’s finances. However, it is important to note that this price drop is only seen in certain categories, such as butter, dried pasta, and milk, so some consumers may still be feeling the pinch in prices.

Amid all these financial woes due to high inflation in the UK, people are still optimistic about the future, with 42.2% feeling very hopeful and 42.7% feeling somewhat hopeful. Just 10.4% feel somewhat uninspired, while 4.7% are not feeling hopeful at all.

Examining the Hopefulness of UK Citizens for Their Future

Many Britons also feel positive about their purchasing power in the upcoming year despite inflation in the UK. About 27.9% anticipate a slight increase, and 19.2% expect a significant boost. 

On the other hand, 27.4% of the respondents believe their purchasing power will remain unchanged, while 18.1% expect a slight decrease, and 7.4% are concerned about a notable drop in their purchasing power.

However, the National Institute for Economic and Social Research (Niesr), a think tank, has issued a warning about diverging economic trends in the UK. While spending power is expected to surge in London, it is predicted to plunge in other regions. In fact, workers in some parts of the UK may find their spending power still below pre-pandemic levels by the end of 2024. This issue persists despite wage increases, which, when adjusted for rising prices, have failed to keep pace, causing financial burden on households, particularly in regions such as the West Midlands and East of England.

Anticipating the Evolution of Purchasing Power Among UK Citizens in 2024

How are British people feeling?

Regarding the emotional well-being of the British public, our survey revealed a spectrum of sentiments ranging from gratitude and relaxation to weariness and concern. 

Most participants felt gratitude, with 20.5% expressing thankfulness. This sentiment points to an underlying appreciation and acknowledgement of the positive aspects of life.

Following closely behind were feelings of relaxation, echoed by 16.2% of respondents, suggesting a collective desire for calmness and serenity in an otherwise fast-paced world. 

Conversely, around 17.8% of British people admitted to feeling “tired,” suggesting the toll of daily stressors and demanding lifestyles. This aligns with studies showing that roughly 5–7% of individuals who visit their family doctor report feeling tired, reflecting widespread fatigue. Despite the awareness of the importance of exercise and a balanced diet to enjoy better health and better sleep, a recent survey shows the irony of how chronic fatigue is the primary reason behind Britons’ reluctance to adopt a healthy lifestyle.

On the flip side, optimism also emerged as a prominent theme, with 9.6% expressing hope and positivity for the future. This hopeful outlook aligns with the earlier survey on how many British see their future in terms of their financial state, 

A smaller portion of respondents indicated concern, worry, and a sense of loss. These emotions, reflected by 4.7%, 4.7%, and 4.1% of individuals, respectively, underline the complex and often challenging realities that individuals navigate in their daily lives.

Current Sentiments Amongst the British Population

UK’s Top Societal Concerns

For a wealthy country like the United Kingdom, poverty and health still emerged as their top concerns

Almost half (47.1%) of the respondents said they are worried about poverty, particularly the lack of economic means to live a decent life. 

Based on the Minimum Income Calculator,  a person living in the UK must earn £20,383 per year or  £325.26 per week to achieve a minimum decent lifestyle. 

Despite having the world’s best-known universal health systems, 46.6% of respondents from the UK are deeply concerned about health-related matters, including the quality of health services and mental health.

A possible factor in this is the mass resignation of National Health Service (NHS) staff due to pay and work-life balance issues. Early this year, NHS saw the biggest walkout in its 75-year history. 

As the government fails to meet the demands of health workers, many are reportedly going to private hospitals. 

​​“Our providers are telling us that people are going private, many for the first time, and the key factor driving that is the challenge in accessing NHS care,” said David Furness in an interview with CNN. Furness is policy director at the Independent Healthcare Providers Network, an industry body for private healthcare companies. 

Top 10 Societal Concerns Among British Citizens at Present

To Wrap Up

The United Kingdom is one of the biggest economies in the world. While inflation in the UK has moderated from its peak, the prices of goods and services continue to rise, prompting concerns among consumers. 

Despite these financial woes, a significant portion of the surveyed population remains optimistic about the future, with gratitude, relaxation, and weariness representing the emotional landscape. Notably, poverty and health emerged as top concerns, with many individuals expressing worry about the lack of economic means to live a decent life and the quality of health services, respectively.

As the nation navigates economic challenges, there is a strong call for proactive measures, signalling a collective endeavour to create a more equitable future.

Want to know more about UK consumers? Feel free to request a demo today for more in-depth insights! Access our comprehensive report on UK consumers, featuring rich data, interactive graphics and expert analysis.

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