Essential Inflation Report

Belake Research has published their first Essential Inflation Report, exploring the differential impacts of inflation experienced by those on limited budgets, whose buying choices are limited. The report shows those people whose buying choices are limited to the most essential items in life experienced inflation 20% higher in the period 2011 to 2015. This has profound implications for policy makers, leaders, decision makers and anyone who works with poverty, low income families and debt issues.

This report is our first look at inflation indices and their profound differences between different parts of the community. It extends research already completed by the Office for National Statistics which already showed a higher rate of inflation for those on low incomes. However, this research adds further depth by exploring the effects of product substitution, when families substitute more expensive luxuries for more essential alternatives, and finds that inflation is 20% higher as a result.

Moreover, this impact is likely to be supplementary to the effect of having a low income already found by the Office for National Statistics. Therefore people on low incomes experience a double impact.

This research is not only relevant for those on low incomes, but also those on middle incomes too, who find their choices limited. Middle income earners experiencing a drop in income, or having significant financial commitments will experience the same impacts on the portion of their income that is disposable.

The new indices have been constructed on exactly the same methodology as the ONS's own Consumer Price Indices, and are designed to be directly comparable.

Please download your free copy of the full report here.