High inflation continues to hit low-income households much harder than rich ones. While the cost of living rose an average of 8.7 percent in January, low-income families and single people living alone had to shoulder a 10 percent inflationary burden, according to the inflation monitor published today by the Institute for Macroeconomics and Business Cycle Research (IMK) of the unionized Hans Böckler Foundation.
For people living alone with very high incomes, the cost of living rose by only 7.4 percent. “Low-income families are particularly affected by the drastic increase in the price of household energy and food, as these basic needs make up a particularly large part of their consumer expenditure,” explain experts Sebastian Dullien and Silke Tober.
Easing is already in sight
With a view to the coming months, the researchers expect a certain easing of the general price trend. From March 2023, inflation should be several percentage points lower, just because of so-called base effects, the experts predicted.
This is because energy prices in particular exploded in 2022 shortly after the Russian attack on Ukraine. There are also signs of calm in the area of food if the war in Ukraine does not escalate further.
In principle, however, low-to-middle-income households would feel inflation more than the wealthy until energy and food prices for households rose no more than overall inflation, the IMK said.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
