Inflation affects everyday consumers primarily by eroding their purchasing power, leading to higher costs for essential items like food, energy, and fuel. As noted, 'the cost of living is more than 11% higher than it was a year ago,' and individuals with specific spending habits may experience even greater increases in their personal inflation rates, which may not be fully reflected in overall inflation statistics [9]. 

Moreover, inflation disproportionately impacts lower-income households, for whom essentials account for a larger portion of their spending. For instance, energy, food, and drink comprise around 15% of lower-income households' budgets compared to 10% for wealthier households, resulting in a sharper inflation experience for the less affluent [9][10][12].

What are the effects of inflation on everyday consumers?

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