UK’s low-income families to lose a fifth of their spare cash in 2022

theguardian.com:

The UK’s poorest families will see the amount of spare cash at their disposal drop by a fifth this year with £850 less to spend on non-essentials as shop prices hit a decade high.

Pressure on family budgets is tightening as grocery price inflation reached 5.2% in March, the highest level since April 2012, according to the latest figures from market analysts Kantar.

The company said prices were rising fastest for pet food and savoury snacks, such as crisps, but were still falling for some products such as fresh bacon.

Spare cash is also under pressure from rises in the price of clothing and furnishings with non-food retail price inflation accelerating to 1.5% in March, from 1.3% in February, according to the latest report from the British Retail Consortium (BRC). This is the highest rate of non-food inflation since February 2011.

Price rises are being fuelled by the rising cost of labour and basic commodities such as wheat and cooking oil – as well as energy and packaging driven by a combination of Brexit, resurgence in demand as economies reopen after pandemic lockdowns and the war in Ukraine.

Helen Dickinson, chief executive of the BRC, said the full impact of rising costs for retailers and their suppliers was “yet to be seen”.

“There have been mounting cost pressures throughout the supply chain for some time, including rising wages, input costs, global commodity prices, energy, and transport. Many of these costs are beginning to be exacerbated by the situation in Ukraine,” she said.

Rising energy bills, food and transport costs are set to plunge many into the red with 13% of households claiming they are only just about managing to cover minimum payments on credit card bills with a further 6% already unable to, according to