Lalitha Try
@lalithatry.bsky.social
Economist at the Resolution Foundation working on improving living standards and reducing poverty
Uprating is also essential to help families keep up with ever-increasing costs: the overall price level has risen by 25 per cent since July 2021, while food prices have risen by 38 per cent and energy has risen by 55 per cent.
October 23, 2025 at 8:16 AM
Uprating is also essential to help families keep up with ever-increasing costs: the overall price level has risen by 25 per cent since July 2021, while food prices have risen by 38 per cent and energy has risen by 55 per cent.
The increase in UC is desperately needed: the value of the UC standard allowance fell by 10 per cent in real-terms between 2012-13 and 2025-26; the April 2026 increase of 6.2 per cent will undo just two-fifths of that fall (40 per cent).
October 23, 2025 at 8:16 AM
The increase in UC is desperately needed: the value of the UC standard allowance fell by 10 per cent in real-terms between 2012-13 and 2025-26; the April 2026 increase of 6.2 per cent will undo just two-fifths of that fall (40 per cent).
But not all the benefit system will rise with inflation. LHA rates are frozen as default. The UC health element for new recipients will be halved from 2026-27; for existing recipients, it will rise by 1.5 per cent, so that the sum of UC standard allowance and UC health rise by inflation.
October 23, 2025 at 8:16 AM
But not all the benefit system will rise with inflation. LHA rates are frozen as default. The UC health element for new recipients will be halved from 2026-27; for existing recipients, it will rise by 1.5 per cent, so that the sum of UC standard allowance and UC health rise by inflation.
September’s inflation data shows the annual rate of CPI inflation was 3.8 per cent, the same rate it was in August 2025, but over twice its September 2024 level. This grim news came with a silver lining as September inflation is usually used to uprate most benefits the following April.
October 23, 2025 at 8:16 AM
September’s inflation data shows the annual rate of CPI inflation was 3.8 per cent, the same rate it was in August 2025, but over twice its September 2024 level. This grim news came with a silver lining as September inflation is usually used to uprate most benefits the following April.
Because poorer households were spending a higher proportion of their income on things like food and energy that saw larger price rises, they also faced higher rates of inflation than higher-income households did during the cost of living crisis.
September 11, 2025 at 10:23 AM
Because poorer households were spending a higher proportion of their income on things like food and energy that saw larger price rises, they also faced higher rates of inflation than higher-income households did during the cost of living crisis.
Given that context, it’s not surprising to see that low-income households were spending a higher proportion of their consumption on essentials such as food and energy, with the poorest fifth spending double the proportion of their consumption on energy compared to the richest fifth.
September 11, 2025 at 10:23 AM
Given that context, it’s not surprising to see that low-income households were spending a higher proportion of their consumption on essentials such as food and energy, with the poorest fifth spending double the proportion of their consumption on energy compared to the richest fifth.
The 2023-24 financial year was the second of the cost of living crisis, with inflation averaging 5.7% and the energy price cap peaking at over £2,000 in Q2 of 2023.
September 11, 2025 at 10:23 AM
The 2023-24 financial year was the second of the cost of living crisis, with inflation averaging 5.7% and the energy price cap peaking at over £2,000 in Q2 of 2023.
There’s some notable issues with the LCFS data: the response rate is only 28%, far below the pre-covid rate (and it was falling before covid too). The LCFS also undercounts consumption compared to the ONS’ National Accounts data – another source of consumption data, and this has worsened over time.
September 11, 2025 at 10:23 AM
There’s some notable issues with the LCFS data: the response rate is only 28%, far below the pre-covid rate (and it was falling before covid too). The LCFS also undercounts consumption compared to the ONS’ National Accounts data – another source of consumption data, and this has worsened over time.
Looking ahead, inflation is expected fall gradually from next year onwards. But we’ll get a new Bank of England forecast for inflation next month, along with another decision on interest rates.
July 16, 2025 at 8:07 AM
Looking ahead, inflation is expected fall gradually from next year onwards. But we’ll get a new Bank of England forecast for inflation next month, along with another decision on interest rates.
Looking ahead to July’s inflation data, the energy price cap fell by 7 per cent in Q3. However, we wouldn’t expect that to have a big impact on household bills, as less energy is consumed during Q3 than in other parts of the year, especially winter.
July 16, 2025 at 8:07 AM
Looking ahead to July’s inflation data, the energy price cap fell by 7 per cent in Q3. However, we wouldn’t expect that to have a big impact on household bills, as less energy is consumed during Q3 than in other parts of the year, especially winter.
Rising energy costs have left more people in underheated homes: one-in-five people (21 per cent) in low-to-middle income non-pensioner households were unable to keep their accommodation warm enough in 2022-23.
July 16, 2025 at 8:07 AM
Rising energy costs have left more people in underheated homes: one-in-five people (21 per cent) in low-to-middle income non-pensioner households were unable to keep their accommodation warm enough in 2022-23.
Energy prices rose significantly during the cost of living crisis but gas and electricity prices had been rising significantly before that: rising by 150 per cent in real-terms between 2000 and 2019.
July 16, 2025 at 8:07 AM
Energy prices rose significantly during the cost of living crisis but gas and electricity prices had been rising significantly before that: rising by 150 per cent in real-terms between 2000 and 2019.
Energy prices have been particularly weighing down on household incomes and consumption in recent years: in 2022-23, low-to-middle income households spent 11 per cent of their total non-housing consumption on energy.
July 16, 2025 at 8:07 AM
Energy prices have been particularly weighing down on household incomes and consumption in recent years: in 2022-23, low-to-middle income households spent 11 per cent of their total non-housing consumption on energy.
Although inflation isn’t as high as it was during the peak of the cost of living crisis, prices are still high and rising faster than the inflation target. Since July 2021, prices overall are up 25%, energy prices are up 63%, and food is up 37%.
July 16, 2025 at 8:07 AM
Although inflation isn’t as high as it was during the peak of the cost of living crisis, prices are still high and rising faster than the inflation target. Since July 2021, prices overall are up 25%, energy prices are up 63%, and food is up 37%.
Services inflation, the BoE’s key measure of domestic inflationary pressure, actually remained unchanged compared to May’s data, at 4.7%. But given in May, the BoE forecast it would fall to 4.6%, it’s still a bit higher than expected.
July 16, 2025 at 8:07 AM
Services inflation, the BoE’s key measure of domestic inflationary pressure, actually remained unchanged compared to May’s data, at 4.7%. But given in May, the BoE forecast it would fall to 4.6%, it’s still a bit higher than expected.
In less than ideal news, core inflation has risen to 3.7% - up from 3.5% in May.
July 16, 2025 at 8:07 AM
In less than ideal news, core inflation has risen to 3.7% - up from 3.5% in May.
So why is inflation at 3.6%? This chart shows contributions to annual inflation is coming to a large extent from energy costs, as the price cap was higher in Q2 of 2025 than in Q2 2024.
July 16, 2025 at 8:07 AM
So why is inflation at 3.6%? This chart shows contributions to annual inflation is coming to a large extent from energy costs, as the price cap was higher in Q2 of 2025 than in Q2 2024.
Petrol prices have ticked up a bit in recent weeks, on account of the recent large rise in oil prices.
July 16, 2025 at 8:07 AM
Petrol prices have ticked up a bit in recent weeks, on account of the recent large rise in oil prices.
Transport is the main area pushing up on the headline rate of inflation, following on high oil prices last month. Restaurants and hotels, and housing and bills are pushing down on inflation, but not enough to counteract upwards contributions.
July 16, 2025 at 8:07 AM
Transport is the main area pushing up on the headline rate of inflation, following on high oil prices last month. Restaurants and hotels, and housing and bills are pushing down on inflation, but not enough to counteract upwards contributions.
Surprise ONS inflation data today, showing that CPI inflation rose to 3.6% in June from 3.4% in May, 0.2ppts higher than forecast by the BoE. Here's a thread on what is driving this:
July 16, 2025 at 8:07 AM
Surprise ONS inflation data today, showing that CPI inflation rose to 3.6% in June from 3.4% in May, 0.2ppts higher than forecast by the BoE. Here's a thread on what is driving this:
🚌 Railcards and concessionary bus passes reduce the cost of transport for some groups, but they don’t target support well based on income: it would be a better use of money to target them towards people receiving means-tested benefits than giving them to all over 60s - the policy in much of the UK.
July 1, 2025 at 9:29 AM
🚌 Railcards and concessionary bus passes reduce the cost of transport for some groups, but they don’t target support well based on income: it would be a better use of money to target them towards people receiving means-tested benefits than giving them to all over 60s - the policy in much of the UK.
Unlike existing support, a social tariff can target support towards households on a low-income and with high energy need. The Government should, in consultation with the industry, set up the infrastructure and data sharing needed for a social tariff so that it's in place before the next price shock.
July 1, 2025 at 9:29 AM
Unlike existing support, a social tariff can target support towards households on a low-income and with high energy need. The Government should, in consultation with the industry, set up the infrastructure and data sharing needed for a social tariff so that it's in place before the next price shock.
The challenge with any programme that provides support for energy bills is how to target people with the greatest energy need as well as those on a lower income, as energy need varies much more within the same income decile than it does across the income distribution.
July 1, 2025 at 9:29 AM
The challenge with any programme that provides support for energy bills is how to target people with the greatest energy need as well as those on a lower income, as energy need varies much more within the same income decile than it does across the income distribution.
But even at these higher prices, households are still set to spend 3x more on energy than on water.
If we’re looking for where to support households with their bills, energy should remain our focus.
If we’re looking for where to support households with their bills, energy should remain our focus.
July 1, 2025 at 9:29 AM
But even at these higher prices, households are still set to spend 3x more on energy than on water.
If we’re looking for where to support households with their bills, energy should remain our focus.
If we’re looking for where to support households with their bills, energy should remain our focus.
🚿 As energy prices have fallen from their recent peaks, water bills have climbed the agenda. Across England and Wales, they rose by 26% on average in April this year. In relative terms, these rises will hit poorer households hardest.
July 1, 2025 at 9:29 AM
🚿 As energy prices have fallen from their recent peaks, water bills have climbed the agenda. Across England and Wales, they rose by 26% on average in April this year. In relative terms, these rises will hit poorer households hardest.