Social challenges

Intense pressure on cost of living

09/09/2022 PNG

Price hikes in energy and food following Russia's invasion of Ukraine have ratcheted up pressure on the cost of living, which was already edging up before February 2022. Lower-income households, which must devote a significantly larger share of their incomes to necessities, are being hit especially hard by the inflationary squeeze caused by the supply shock. Data from the six largest European countries show the bottom fifth of households by income have had to increase household expenditure by about 50% more than the top fifth in response to the supply shocks in energy and food.

See also: OECD Employment Outlook 2022.