The latest data shows that the poorest tenth of UK households endured an inflation rate of 14.5% in October 2022 bam, while the consumer price index measured 11.1%. Food and energy costs make up 25% of spending for the low‑income group compared with 14% for the richest, amplifying the impact when those prices climb.

The Bank of England’s rate hike, peaking in August 2023, fed through to mortgage interest. Mortgage payments added 2% to the wealthiest decile’s inflation, but only 0.4% for the poorest, turning a regressive crisis in 2022 into a briefly progressive one in 2023.

For investors, the widening gap signals persistent pricing pressure that could keep inflation above the 2% target. Rising mortgage costs and uneven consumer spending may dampen retail demand and push lenders to tighten credit, while policymakers face pressure to balance inflation control with support for lower‑income households.

The spread has narrowed, yet the overall inflation environment remains above target. Market participants should monitor how energy shocks and BoE policy moves continue to shape spending patterns across income groups.