Do the poor face higher inflation?

HIGH INFLATION is hard to escape, with essentials like household energy bills and food soaring in price. In Britain the consumer-price index was 9% higher in April 2022 than it was a year earlier, the highest rate in 40 years. In that same month Americans suffered a rate of 8.3%, with food and energy prices rising by even more. Although prices are rising for everyone, there is extra reason to worry about those in or close to poverty. Not only did benefits and the state pension in Britain rise by a mere 3.1% in April, the headline inflation figures are merely averages. Are the poor facing higher inflation rates than the rest?

Statistical agencies calculate inflation by looking at how people allocate their spending across all manner of goods and services, from food and energy to holidays and internet access. They then use those shares of each category as weights when calculating the average rate at which prices change. As the rich tend to spend most, the weights will more closely reflect their spending patterns than those of the poor. And if the poor tend to spend a higher share of their income on products that are becoming more expensive particularly quickly, their experienced inflation rate will be higher than the headline figure suggests.