Higher earners are bearing the brunt of rising costs as Labour's campaign impacts the middle classes, according to official figures released Friday by the Office for National Statistics (ONS). Wealthier households are now seeing prices rise higher than poorer ones for the first time since March last year. This trend marks a shift from previous periods where lower-income households experienced higher inflation.
The ONS data revealed that annual inflation increased by 2.7 percent for low-income households in the year to June 2026, while high-income households saw a rate of 2.8 percent. This indicates a marginal but notable difference affecting those with greater financial means.
Workers are also suffering more from the rising cost of living compared to retirees. In June, working households experienced an annual inflation rate of 2.9 percent, compared to 2.5 percent for retired households. While inflation fell for both groups between March and June, the gap between them widened by 0.4 percentage points.
Private renters reported the highest annual inflation rate at 3 percent in June, exceeding rates for social renters and homeowners. This suggests that housing costs, particularly in the private rental sector, are a significant driver of inflation for affected households.
These economic pressures are contributing to increased public anxiety. Separate data from the ONS indicates that Britons have grown steadily more anxious since Labour came to power, with anxiety levels reaching their highest point since December 2023 according to a quarterly wellbeing report. Women reported particularly high rates of anxiety compared to men, and individuals aged 20 to 24 were most likely to express anxiety.
Shadow Chancellor Sir Mel Stride commented on the figures, stating, "Under Labour, everything seems to be getting worse. The cost of doing business is up, the cost of living is up, and everyone is left carrying a bigger burden and more anxiety about covering the basics."
Anne Strickland from the TaxPayers' Alliance added, "Working households are being squeezed, with renters and non-retirees still hit hardest by rising costs. The cost-of-living crisis is far from over for taxpayers who are funding a state that keeps demanding more."
A Treasury spokesperson responded by outlining actions taken by the Chancellor, John Healey. These include removing VAT on electricity bills for the winter, cutting business rates for pubs, clubs, and live music venues by 20 percent next year, and capping bus fares at £2 throughout 2027. The spokesperson stated these measures were implemented to "give families and businesses breathing space."