Cost of living: Some places in England and Wales are hit harder by the crisis than others | UK News

The cost of living is rising faster in Burnley than in any other urban area in England and Wales, according to new research from policy institute Center for Cities.

Inflation in the Lancashire city is estimated at 11.5% – the highest rate of the 58 urban areas examined by the researchers.

This is significantly higher than London and Cambridge, which have the lowest rate of 8.8%, and the UK average of 9.1%.

Indeed, many of the poorest cities are the hardest hit.

This means that the people least able to cope – those with the lowest wages and the most debt – see their standard of living eroded the most.

Jack Leslie, senior economist at the Resolution Foundation, says this matches their research, which found that inflation is 1.6 percentage points higher for the poorest tenth of households than for the richest.

“The extent of rising cost pressures depends to some extent on families’ spending habits and where they live,” he says.

“With inflation currently driven by increased energy bills and gasoline pricesrural areas with less well-insulated housing stock and less public transport connections face particularly strong cost pressures. »

Many urban areas in the north of England also have poorly insulated houses.

In Burnley, 80% of homes are energy intensive and 15% of spending is on vehicles. Whereas in London, these figures are only 58% and 10%.

High energy bills are a major driver of high inflation in poorer urban areas. This erodes purchasing power because wage increases do not keep up with rising prices.

Does housing drive up inflation?

Besides energy costs, you might think that high house prices and rents are a key driver of inflation in places like London.

Housing costs were not included in the calculations made by the Center for Cities researchers due to a lack of data.

Sky News’ analysis of SpareRoom rental data found that the amount of income spent on rent varies widely. But despite high prices in the capital, rent eats up roughly the same amount of income in Burnley.

Households in Burnley spend 21% of their wages on rent, compared to 22% in London and just 17% in Cambridge.

This does not say it all, as many people own their own homes or live in social housing.

But Valentine Quinio, a senior analyst at the Center for Cities, says that doesn’t change much because housing isn’t the main driver of inflation at the moment.

“Our estimates always paint an accurate picture of the geography of inflation [as] the main driver is energy (and food prices), so it’s looking at how these vary between cities that gives the clearest idea of ​​where the most affected are,” she says.

Government donations help but not enough

The government recently announced £15 billion to help households cope with rising energy costs.

Research from the Center for Cities found that households in the North and Midlands are likely to get more than other parts of the country, but despite this most people still face higher energy costs.

Only 19% of the 58 urban areas studied are better off after the handout. The average Burnley household still faces a £109 increase in annual energy costs.

A spokesperson for the Department of Leveling, Housing and Communities said: ‘We recognize the challenges households are facing with the cost of living which is why we are providing a £37billion support package which helps millions of people to meet the rising costs of living.

“We are investing a total of £6.6 billion in this parliament to improve energy efficiency across the country, benefiting tens of thousands of homes and saving an average of £300 a year on their utility bills. ‘energy.

“The changes we have made to Universal Credit mean that 1.7 million households will keep an average of around £1,000 extra per year. »

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