Darllenwch y dudalen hon yn Gymraeg

The cost of living has been increasing across the UK since early 2021. The annual rate of inflation reached a 41-year high of 11.1% in October 2022, and the Bank of England raised interest rates to 3% in November, the highest level since the financial crisis of 2008. This affects the affordability of goods and services for households, and also impacts on businesses.

The aim of this blog is not to provide the latest snapshot of the cost of living crisis as this would quickly become out of date. Instead, it signposts key sources of data relevant to the changing situation, with a focus on regularly updated information and data on Wales. While many of the sources listed are official statistics, there are also pointers to third sector organisations and think tanks as these can provide complementary insight or leading indicators to monitor the crisis.

Useful roundups

The Office for National Statistics (ONS) produces a number of relevant datasets and articles, with current and upcoming work described on their website. This includes a cost of living insights tool to help navigate the wealth of information on spending, energy, housing, employment, business and society. Some of the datasets have breakdowns for UK nations and regions, including Wales.

The House of Commons Library produce a number of relevant briefings for the UK, signposted on their website. Their briefing on rising cost of living is regularly updated with latest information covering inflation, government support, and the impact on households.

Data Cymru are developing a cost of living data dashboard with a range of information for Welsh local authorities, Wales and the UK as a whole, planned for publication the first quarter of 2023.

Inflation and interest rates

Inflation is a measure of the rate at which prices increase. Measures of consumer price inflation track prices that households pay for a representative basket of goods and services, which can be considered part of ‘the cost of living’.

It is the Bank of England’s role to keep the cost of living stable, and one of its major levers to enable this is the ability to change the main interest rate in the UK. They publish an explanation of the bank rate (also known as base rate or interest rate) alongside latest figures and a historical dataset. The Bank’s Monetary Policy Committee makes its interest rate decisions using economic analysis and inflation projections from the quarterly Monetary Policy Report. Other projections and analysis are made available by organisations including the Office for Budget Responsibility, Resolution Foundation, and Institute for Fiscal Studies.

Drivers of inflation

Inflation has risen sharply in recent months, driven by a broad range of items. The ONS published an article on recent drivers of UK consumer price inflation in March 2022. They followed up in April 2022 with an article on the recent challenges faced by food and drink businesses and their impact on prices. Those interested in datasets on specific drivers can filter beneath overall CPI and download data for categories including transport, food, or gas.

On energy and fuel, the Department for Business, Energy and Industrial Strategy publish a collection of statistics on energy prices and on road fuel and other petroleum price statistics.

Impact on households

Every fortnight, the ONS update public opinions and social trends in Great Britain, based on the Opinions and Lifestyle Survey. The survey asks people whether their cost of living has increased over the last month, and if so, what has contributed to this increase, including gas and electricity bills, price of fuel, price of food shop, and rent or mortgage costs. Respondents are then asked about lifestyle changes made because of the rising cost of living, such as using less gas and electricity, spending less on food shopping and essentials, or cutting back on non-essential journeys in their vehicle. A number of datasets underpin this release, most notably one on household finances.  

Less frequently, the ONS publish a larger dataset based on several waves of the survey. This has included Wales data, and breakdowns by demographic and household characteristics, disability status, employment status and personal income. Using this larger dataset, the ONS have produced some in depth analysis including articles on:

• What actions are people taking because of the rising cost of living?
• Impact of increased cost of living on adults across Great Britain
• Parents more likely to report increases in their cost of living

The ONS’ annual publication on family spending in the UK presents data on household expenditure by age, income, economic status, household composition and region. This helps to identify what kind of households are most likely to be impacted by price increases for particular goods and services.

Household income and finances

Timely management information on numbers accessing hardship funds or advice services can indicate trends in terms of the impact on household finances. Welsh Government regularly publish data on payments to households made from the Discretionary Assistance Fund. This fund provides emergency grants for essential costs.

Citizens Advice publish a cost of living data dashboard for England and Wales, and a monthly Wales-specific dashboard. This includes the numbers of people coming to them for crisis support on issues including energy, food and homelessness.

To track short-term pay or earnings growth, the ONS publish monthly statistics on average weekly earnings in Great Britain. More detailed data on earnings is available from the ONS’s annual survey of hours and earnings, including data down to Welsh local authority, published in a Welsh Government release.

However, earnings are only one aspect of household income. Government policies, including those on personal taxes, benefits and pensions, will also impact on household income. Following UK Government budget statements, the House of Commons Library publish briefings on the likely impact, summarising analysis from organisations such as the Office for Budget Responsibility, HM Treasury, selected think tanks and others.

Several official household surveys ask questions about income and finances, and topics such as food insecurity. However, statistics from these larger, government surveys tend to be published annually with a lag of a few months or more for data processing. Some such sources worth exploring for further detail include the National Survey for Wales, DWP’s Family Resources Survey and Households Below Average Income data series, ONS’ Household Finances Survey and their annual data on regional gross disposable household income. Several of the national wellbeing indicators for Wales draw on these data sources, and relate to the impacts of the cost of living crisis.

Energy costs

Welsh Government have released fuel poverty modelled estimates for Wales as at October 2021, including breakdowns by household and dwelling characteristics, and some information on the potential impact of the April 2022 fuel price increase. It also presents some data on fuel poverty across the UK. Welsh Government are also developing a fuel poverty data dashboard which will incorporate data from internal and external sources including other government departments and Ofgem, and is planned for publication in the first quarter of 2023.

Senedd Research have published an article on rising fuel costs, explaining how energy is priced, recent trends in energy prices, causes and responses.

Ofgem’s data portal presents data on the energy industry in Great Britain, including data on energy debt.

The ONS Opinions and Lifestyle Survey asks those who have gas or electricity supplied to their home whether they are behind on payments and how easy it is to afford their energy bills.

Food poverty

Twice a year the Trussell Trust publish the number of emergency food supplies distributed by food banks in their network, including data broken down by UK region and local authority. The Independent Food Aid Network regularly collate and publish data from independent food banks, and the Food Foundation commissions regular surveys to assess UK food insecurity levels.

Housing costs

The ONS publish a monthly UK House Price Index, and a monthly experimental Index of Private Housing Rental Prices, which tracks prices paid for renting property from private landlords in the UK. Welsh Government publish statistics on social landlord housing rents in Wales on an annual basis. The Bank of England calculate monthly quoted interest rate series, as weighted averages for a range of lending and deposit products offered to households, including mortgages.

The ONS Opinions and Lifestyle Survey asks those who pay rent or mortgage payments whether these have increased in the last 6 months, whether they are behind on payments and how easy it is to afford their rent or mortgage.

The Ministry of Justice publish quarterly statistics on possession claim actions in county courts by mortgage lenders, social and private landlords in England and Wales, including data by country and local authority. Annual homelessness statistics are published by Welsh Government, providing figures on households applying to local authorities for housing assistance and the number of homeless households in temporary accommodation.

Other analysis of the impact on households

Senedd Research have published a number of research articles examining the impact of the cost of living crisis on specific groups or areas including low-income households, women, unpaid carers and domiciliary care, rural communities, and disabled people.

A range of think tanks and other organisations provide analysis on issues relevant to the cost of living, some of which provide information about Wales, as well as the UK. These include Public Health Wales, Wales Governance Centre, Bevan Foundation, Wales Centre for Public Policy, Institute for Fiscal Studies, Resolution Foundation, and the Joseph Rowntree Foundation.

Impact on businesses

Businesses are also being impacted by the rising cost of living, with many businesses reporting needing to absorb costs or pass price increases on to customers.

Every fortnight the ONS release a new bulletin on Business Insights and Impacts on the Economy, drawing on data from the voluntary Business Insights and Conditions Survey, and aiming to deliver real-time information on issues affecting UK businesses and economy, including financial performance, workforce, trade, and business resilience.

The ONS have also released analysis of rising business insolvencies and high energy prices.

What help is available?

The Welsh Government website describes financial support that may be available to help people during the cost of living crisis, including support schemes from both UK and Welsh Government, as well as wider sources of help and advice. There is also a webpage bringing together resources and support for businesses during the cost of living crisis.

Senedd Research have produced an article that signposts a range of government and other help and information on cost of living support, and an article on support available for businesses.

Assessments of support schemes

In March 2022, the Welsh Government published a distributional analysis of its response to the cost of living crisis, examining the impact on household incomes of three policies to address the cost of living crisis. The Wales Governance Centre, provides analysis and briefings on the impacts of Welsh and UK Government policies on households in Wales. Similarly at the UK level, the Institute for Fiscal Studies, Resolution Foundation and Joseph Rowntree Foundation all provide analysis of UK Government schemes.

Stephanie Howarth
Chief Statistician