World Economy

Inflation in London Outstrips Rest of UK

London’s transport costs have risen by 51%.London’s transport costs have risen by 51%.

London households have experienced inflation almost a third higher than those outside the capital over the last 20 years, according new findings.

Inflation, an increase in prices and associated fall in purchasing power, is calculated by looking at the changing prices of items in an average household’s basket of goods. Londoners have experienced higher inflation to everyone else because of crucial differences in what they spend their money on, and on how the prices of those things have changed, Business Matters reported.

Housing is the main culprit, but not the only one. Londoners’ housing costs, which include renting and buying homes, as well as maintenance, have risen by 123%, since 1997 compared to 84% for those outside London, thanks in particular to the soaring cost of buying and renting homes in the capital.

Not only have London’s housing costs gone up faster, Londoners also devote a much bigger share of their overall spending to housing: £3 ($3.92) in every £10 ($13.08), compared to £2.50 in every £10 for those elsewhere.

Meanwhile Londoner’s transport costs have risen by 51%, while everywhere else, households have seen their transport costs rise 38% over the last 20 years. This is mainly because fares, which have risen dramatically in price, make up over a quarter of Londoner’s total transport budget, compared to just £1 in every £11 for those outside London.

Those outside the capital rely more on cars, and the cost of buying and maintaining a vehicle has risen much more slowly than fares. Londoners also devote twice as much of their spending to education (mainly private school fees). This makes up 2% of their total spending, compared to 1% for those outside the capital. Education costs have inflated by an astonishing 326% in the last 20 years.

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