New figures show that mortgage holders are the most affected by the cost of living crisis.
Homeowners are the most affected by the cost-of-living crisis, as mortgage interest rates have risen by 56% over the last year, according to the Office for National Statistics (ONS).
The ONS has released new figures on the cost-of-living crisis. Mortgage holders face a higher inflation rate (9.3%) compared to renters (7.2%) and the entire household (8.2%).
This is much higher than the official rate of inflation, which was 6.7pc. It indicates that cost pressures on families are greater – and perhaps more persistent – than previously suggested.
The “Household Costs Index” is a new way to measure inflation. It includes mortgage payments, student loans, and other costs that are not included in the CPI. This index considers the expenses that consumers have to pay.
According to new data from ONS, mortgage interest rates have increased by an average of 56% for the average borrower in the past year.
The figure increased to 87% compared to December 2021 when the Bank of England raised interest rates for the first time since the pandemic, which was at a low of 0.1%.
The ONS found that one in three mortgage borrowers reported their payments had increased in the last year. A similar percentage said they struggled with affordability.
Last year, the impact of rising energy costs on households was most severe for low-income families and retirees.
As the gas crisis eased in Europe, the pressure on borrowers has increased due to the mortgage crisis.
Some mortgage borrowers are still waiting for a remortgage.
Households are spending an extra £5.1bn on food every quarter compared to 2021. However, they are getting almost 6% of that money back.
The ONS stated that households are changing their behavior and consuming less or choosing lower quality food while spending more money in cash terms.