The Institute for Fiscal Studies has just published an interesting and accessible piece of research into the impact of inflation on different age groups and income levels. The research looked at differences in spending patterns and household-level inflation rates between different income groups. It found marked differences in spend between higher and lower income households. Lower-income households spent more on food, water and fuel and less on leisure goods and services than higher-income households.
The report concluded that these differences in spend patterns lead to high and low income households experiencing different inflation rates in any given year. The IFFS found that lower income households had experienced higher inflation rates than higher-income households across the previous ten years. There were also differences in the impact of inflation within income groups based on age and household size.
The report's ten-year spend patterns and other data will be of both general interest and for referencing in policy formulation.
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