Introduction

Understanding what Britain thinks: our research

Since June 2021, Kantar Public and More in Common have tracked attitudes to fairness and inequality in Britain. We have asked a series of questions on: the salience and significance of inequality, how individuals are affected by the rising cost of living, and what the Government should do about it.

The rising cost of living is dominating political and media discourse. Millions of households are facing financial pressure as inflation hits its highest rate in decades, energy prices soar to record levels, and interest rates rise. Analysis suggests the impact of these rises is most concentrated on the poorest households.Nevertheless, the impact of rising prices affects everyone. In March 2022, the OBR (Office for Budget Responsibility) forecast a 2.2 per cent fall in real household disposable incomes per person – the largest drop since records began in the 1950s¹.Similarly, at the start of September, the Resolution Foundation projected that typical real household income would have dropped 10 percent or £2,800 by 2024, being the worst 2-year change in at least a century².However, neither of these forecasts take into account the impact of the Government’s ‘mini-budget’ announcements from 23rd September or the subsequent changes to that approach. Elements of the £45 billion tax cut announced have since been withdrawn, but the market action at the time caused the sterling to drop to its lowest level against the dollar since 1985 and a rise in interest rates. This particularly impacts those on mortgages with the typical mortgage payment projected to increase by over £1000 a year³.

Taken together, this has led to increasingly extensive action from the Government to support people. Firstly, a £37 billion ‘cost-of-living package’ in May provided a £400 energy bills rebate to every household, a £650 Cost of Living Payment for all households on means-tested benefits, and a cut in fuel duty by 5 pence a litre⁴.However, over the summer, it became apparent that this alone would not be enough. As a result, from October 1st until April 2023 (when it will be reviewed), the Government's ‘Energy Price Guarantee’ caps the energy bill for an average household to £2500 – a commitment which could cost over £100 billion⁵.This report explores both how Britons' lives have been impacted by the rising cost of living, and their views on what should be done about this crisis. Kantar Public and More in Common will continue to monitor these issues and trends moving forwards.