It’s all indicated with the rising cost as per the most recent REDI-Updates briefing from the University of Birmingham’s West Midlands Regional Economic Development Institute (WMREDI) explores the supply-side flaws that are to blame for the rising cost-of-living crises’ effects on individuals and companies.
Inflation has reached its greatest pace in 40 years since the pandemic ended, reaching double digits in 2022 and 2023, with the price of a basic grocery store rising by 24.2% between March 2019 and March 2023.
By analyzing and evaluating the global, national, and local reasons causing inflation as well as how rising prices are affecting both businesses and individuals, REDI-Updates investigates how fast growing inflation is affecting the local and national economies. It also looks at the steps various groups are taking to lessen the effects of price increases, like household food bank usage has risen 52% from pre-pandemic levels, as households struggle to afford essentials.
According to the research, not all enterprises, households, or public sector services are equally impacted by the crisis; some industrial sectors, socioeconomic groups, and public sector services are more severely affected than others. With the lowest 10% of families seeing an inflation rate of 12.5% and the richest 10% of UK households experiencing an inflation rate of 9.6%, the gap between the rich and the poor is growing. Leveling up and equality aims in the UK are likely to be impacted by this unequal distribution of the crisis’ effects.
In order to understand why inflation in the UK is continuing to be so high while it is declining in comparable nations, the paper also looks at how the UK compares internationally in the context of global inflation. Inflation in the USA began to decrease after reaching just over 8%, whereas inflation in the UK rose as high as 11%. While many nations throughout the world are being harmed by inflation, the UK has been more severely affected. This is largely because of persistent, long-term supply-side problems that are specific to the UK, like low productivity, the consequences of Brexit, and low private sector investment.A spiraling cycle of economic collapse results from the interconnected fates of enterprises and households, which are both touched by and interact with the cost-of-living crises and one another. The UK economy will continue to deteriorate if the supply-side problems that caused the crisis are not addressed, which will make it harder to recover from future crises.
“Our latest edition of REDI-Updates focuses on the serious impacts of the cost-of-living crisis and the supply-side failures driving it,” says Professor Simon Collinson, director of City-REDI/WMREDI. The paper provides evidence-based briefs that summarize the complexities of this shock’s causes and impacts on enterprises, people, and communities throughout the UK. Real-world difficulties will be revealed by robust scholarly study.
Almost every area of the economy has been impacted by the cost of living, and this trend is expected to continue for some time.