This Is Local London:

The ONS calculates the consumer price index by keeping track of the prices of everyday products, this culminates in the “basket of goods”. According the ONS, food prices remain the biggest driver of inflation currently (“the increase was driven by food prices, which leapt by 14.5% from a year earlier, the biggest jump since 1980”). The war in Ukraine has also frozen Ukrainian food exports further exacerbating inflation. 

The cost of energy is the second biggest behind the spiralling inflation. Oil and Gas prices increased as demand surged as life came back to normal after the Covid Pandemic. The war in Ukraine has led to Western condemnation and sanctions on Russia, thus limiting the sale of Russian energy. As a result, the supply of energy fell dramatically, and the energy market had to reach a new equilibrium leading to energy prices rising to “unprecedented” levels.  

 The cost-of-living crisis and out of control inflation have weakened the value of the pound, reaching an all-time, making imports more expensive as firms will pass the costs of an increase in the cost of productions onto the consumer.  

Consequently, the weakening pound will mean that the around 40 % of imported goods in supermarkets, increasing grocery prices and further aggravating the cost-of-Living Crisis. A lower pound to dollar would mean that the price of energy would also increase dramatically for consumers, as the wholesale energy market is traded in dollars. According to the AA, “a weaker sterling could mean an extra 7.50 on the cost of filling up an average family car”. Electrical Goods would also be affected by the fall in sterling and increasing inflation, leading to higher prices for consumers and spiralling cost of living crisis as products from companies such as Apple 

The cost-of-living crisis is a regressive problem as increasing prices of goods and services, increasing mortgage rates take a higher percentage of disposable income.  

Currently, the UK faces a “profound economic crisis” as it experiences stagflation and record-high cost of living increases.

The cost-of-living crisis is affecting people throughout the world. However, Europe does appear to be disproportionately impacted owing to proximity to the War in Ukraine. Estimates suggest nearly two thirds of the population of the UK now moderately or severely impacted by it. It would not be unfair to deem this the biggest crisis to affect – this century past. It is an unprecedented crisis; however, we hope that the common sense and righteousness will prevail, and the war will end soon. Surely there are brighter days ahead for the UK.