Lower-paid people more likely to feel the impact of rising prices

Consumer survey finds that cost-of-living pressures vary widely across different groups

KBC’s monthly survey found that 42%  of Irish people believe their living costs have increased by 5% or more over the last 12 months. Photograph: iStock

KBC’s monthly survey found that 42% of Irish people believe their living costs have increased by 5% or more over the last 12 months. Photograph: iStock

 

Lower-paid people are more likely to feel the impact of rising prices, a consumer survey published on Friday shows.

Rising energy and other prices have been driving up the cost of living since Covid-19 began receding this year. However, Friday’s KBC Bank Ireland’s consumer sentiment index says that cost-of-living pressures vary widely across different groups of people.

Austin Hughes, the lender’s chief economist, notes that people on “lower incomes or reporting difficulties in making ends meet” are more likely to say their living costs are rising rapidly.

However, he adds that better paid people or those making ends meet with ease are more likely to say their living costs were flat or falling.

KBC’s monthly survey found that 42 per cent of Irish people believe their living costs have increased by 5 per cent or more over the last 12 months.

“In stark contrast, a material 25 per cent of consumers say they experienced flat or falling living costs through the past 12 months,” says Mr Hughes.

He also points out that people aged 35 to 54 are more likely to complain of rising living costs, which he says is probably down to their larger households.

Different responses from lower- and higher-paid people reflects the goods and services on which they spend their money, Mr Hughes suggests.

He explains that restrictions on travel and “service activities” curbed better-off families’ spending, resulting in smaller living cost increases.

The KBC Bank Ireland consumer sentiment index for October stood at 86.8, effectively unchanged from September’s reading of 86.4, says the lender.