U.K. Cost of Living Squeeze Underscored by New Inflation Data

 Britain cost-of-living squeeze is hitting the richest and poorest households alike, according to new data that adds to pressure on the government to take action.

Consumer prices grew 5.5% in December for the second-richest 10% of all households and by 5.3% for those in the second to bottom decile, the Office for National Statistics said Friday.

The figures indicated the breadth of pain hitting consumers, who are shouldering higher prices across a wide range of goods and services. Poverty campaigners had said the poorest would be hit hardest because they spend more of their income on essential goods.

Wealthier households are being squeezed because they spend more on items that have seen faster price rises, such as transport, furniture, going out, recreation and health, the ONS said. Poorer households have less to spend on discretionary items and are more exposed to higher prices for staples such as food, energy and clothing.

The government statistics office drew up the report in response to criticism from poverty campaigners including food writer Jack Monroe, who said the headline rates of inflation fail to reflect the experience of poorer households.

“A key point of consumer price indices is to measure inflation as actually experienced by households” said Stian Westlake, chief executive officer of the Royal Statistical Society. “While these changes will go some way to better capture household costs, the issue remains that CPI was never intended for this precise purpose.”