Example of Cost of living Crisis in Britain

What is driving the cost of living crisis UK?

Causes unique to the UK include labour shortages related to foreign workers leaving due to Brexit, and additional taxes on households. 

Factors that have worsened the crisis since 1 April 2022 include 

• Ofgem increasing the household energy price cap by 54%
• an increase in National Insurance
• a rise in Council Tax.
• Trussonomics - U-turns and Ousted Chancellors rocking markets

The UK cost of living crisis is an ongoing event starting in 2021, in which prices for many essential goods in the United Kingdom began increasing faster than household incomes, resulting in a fall in real incomes.

This is caused in part by a rise in inflation in the UK, in addition to the economic impact of global issues including the 2022 Russian invasion of Ukraine and COVID-19 pandemic. 

The UK's cost of living is the most affected of advanced economies. 

While all in the UK are affected by rising prices, it most substantially affects low-income persons. 

The British government has responded in various ways, such as by making provision for a £650 grant for each of the UK's lower income households but the policies announced scared the markets and wiped out hundreds of mortgage products and estimated to wipe $500 billion of the UK economy.