It’s getting harder for those on low incomes to make ends meet

Responding to today’s Monetary Policy Committee's interest rates decision, Helen Barnard, Head of Analysis at the Joseph Rowntree Foundation, said:

“It's getting harder for those on low incomes to make ends meet. The Monetary Policy Committee's decision not to increase the base rate will provide some respite for those paying into mortgages and loans. But prices have been rising faster than average earnings since March. New figures out this week show that average earnings have risen by only 2.1%, while prices rose 2.9%. That's bad news for all workers, but the pressure is even greater for people who also receive in or out of work benefits which haven't increased a penny in 17 months. The Government could help people on the lowest incomes by cancelling the benefits freeze.

“However, average price rises do not tell the whole story. The cost of some essentials has risen faster than the overall inflation rate - electricity is 9% more expensive than this time last year. Households in the poorest fifth of the country spend almost three times as much of their incomes on electricity compared to the richest fifth. With announcements of further price hikes ahead, the cost of staying warm and keeping the lights on will make life tougher for those who can least afford it.”

Annual growth in consumer prices and average weekly earnings