Inflation hits ‘low income families hardest’

Low-income families are those worse affected by inflation, a new study reveals.

According to findings by the Alliance Trust Research Centre, those with an annual income of under £7,000 face an average inflation rate of 34 per cent above the government’s figure.

As a result these consumers could face increased debt management difficulties and may take out a secured personal loan.

People in this wage bracket were also reported to spend some 41 per cent of their budget on necessities such as housing, utilities and food.

Meanwhile, the highest income households spend about 17 per cent of their budget on these basic items.

Head of the research centre Shona Dobbie said: "Inevitably the lowest income group will spend more of their budget on necessities such as housing and utilities and unfortunately it is these goods that have seen the sharpest increase in prices over the last two years."

Ms Dobbie added that during the course of last year, gas and electricity prices increased by 40 and 27 per cent respectively.

According to Welsh Liberal Democrat leader Lembit Opik, a rising number of people in the principality face "catastrophic levels of debt" due to rising inflation and interest rates.

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