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Overview
The cost of living has been rising in recent months in the UK and across the world.
Food and energy prices have been rising markedly over the past year, particularly gas prices, partly in response to the conflict in Ukraine. Global recovery from the coronavirus (COVID-19) pandemic is putting further pressure on prices.
In the UK, prices of consumer goods and services rose by 9.6% in the year to October 2022 – the fastest rate in four decades. Since then the annual inflation rate, as measured by the Consumer Prices Index including owner occupier’s housing costs (CPIH), has slowed.
In the year to August 2023 the annual inflation rate was 6.3%, down from 6.4% in July.
You can explore how the prices of over 450 items in the inflation basket have increased over the past year with our shopping prices comparison tool.
You can use our Personal Inflation Calculator to get your own, personalised inflation rate based on what you spend your money on.
Energy: Rising petrol and diesel prices prevent ease in inflation
The price of motor fuels fell by 16.4% in the year to August 2023. This was a decreased fall when compared with the 24.9% fall in the year to July.
This was because of rises in the price of petrol and diesel between July and August 2023.
This is according to our Consumer Prices Index including owner occupiers’ housing costs (CPIH) release.
The average price of petrol rose 5.3 pence per litre between July and August 2023 to 148.5 pence per litre. The average price of diesel rose 5.9 pence per litre to 151.1 pence per litre in the same period.
Between the same two months last year, prices of petrol and diesel both fell from record highs, by 14.3 pence per litre and 11.3 pence per litre, respectively.
- Read more about the cost of living and energy
Spending: Around two-thirds of adults spending less on non-essentials
Around two-thirds of adults (67%) in Great Britain are spending less on non-essentials because of the rising cost of living.
This is according to those asked between 23 August and 3 September 2023 as part of our latest Public opinions and social trends bulletin.
The survey also revealed that around half (50%) were shopping around more.
A boost in average pay in May to July 2023, coupled with a recent reduction in the rate of inflation (rising prices), means that real wages (adjusted for CPIH inflation) are beginning to improve compared with recent months.
Average regular pay (excluding bonuses) for employees rose by 7.8% in May to July 2023 compared with the same period the previous year, according to the latest labour market data. This maintains the highest growth rate seen since 2001.
- Read more about the cost of living and spending
Housing: House price growth slows while private rents rise at record pace
Across the UK, house prices increased 0.6% in the year to July 2023 (provisional estimate). This was down from the revised estimate of 1.9% in June 2023.
The average UK house price was £290,000 in July 2023 (provisional). This is £2,000 higher than the same month a year ago, but £2,000 less than the recent peak in November 2022.
- Read more about the cost of living and housing
How this affects you
Related links
Read our summary of our current and future analytical work related to the cost of living.
The government is offering help for households. See what cost of living support you could be eligible for.
Explore the UK Measures of National Well-being dashboard, which tracks the progress of a range of factors affecting people’s lives. We have explained some of the findings from new measures added in 2023 in our Most adults report making some changes to their lifestyle for environmental reasons article.