London's cost of living tracker shows us how much more different types of households would have to spend to maintain the same standard of living today as they had in 2020, and which household types are most likely to have had to scale back on essentials. Here we outline what the most recent inflation figures show us.
In October, inflation dropped to 4.7%. Despite this drop, the squeeze facing low-income Londoners remains incredibly tight. To maintain the same standard of living as in 2020, Londoners on the lowest incomes would now need to spend 26% extra per week – compared to 24% extra per week for Londoners on the highest incomes.
Inflation impact - the estimated percentage change in spending for London households, if buying the same goods and services (April 2020 - October 2023)
For lower income households, this price increase is disproportionately driven by rising costs of essentials. Of the 26% extra a week the lowest income Londoners would need to spend to maintain the same standard of living pre-pandemic, 10% is made up of just two essential categories – food and energy.
For Londoners on the highest incomes, these two categories make up 4% of the total price increase of 24%. Leisure activities are a bigger driver of the price increase for this group - spending on restaurants and hotels and leisure and culture make up 7% of the total price increase.