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Poor households have been hit by higher inflation than the rich this year, research found.

Think tank the Resolution Foundation said living costs since January have been driven up by higher housing, food and drink prices.

These hammer poorer families more than most, with food and non-alcoholic drink gobbling up an average 18% of their weekly spend, that's double the 9% for the richest fifth of households.

The Resolution Foundation says, as a result, the poorest 10% of households saw inflation rise more than 2% between January and June, less than the 1.8% for the wealthiest.

(Image: Image Source)

It marks a reverse from the second half of 2016 when the rising cost of fuel, which takes up a bigger chunk of wealthier households’ budgets, meant their inflation rate was higher.

Around a fifth of their weekly spend goes on transport, compared to 11% on average for the poorest fifth of households.

Richer households also spend proportionally more on recreation and culture.

Falling petrol and diesel prices contributed to a bigger than expected slowdown in inflation last month, the Office for National Statistics announced yesterday.

The consumer prices index - which measures prices year on year - dropped from 2.9% to 2.6%.

But experts warn it could be a temporarily blip.

How inflation is higher for poorer households Source: Resolution Foundation

At 2.6%, inflation is still outstripping wage growth, which averaged 1.8% in the three months to May.

Food and drink now accounts for 8% of the rise in inflation, having previously lowered inflation, while alcoholic drinks and tobacco are both driving up inflation.

The flipside of this is that transport costs are now contributing less to rising inflation, accounting for 17% for the increase in June, down from 34% in January.

(Image: Bloomberg)

Stephen Clarke, policy analyst at the Resolution Foundation, said: “The small fall in inflation is good news for struggling households, though with average pay growth barely hitting 2%, pay packets will continue to shrink for the rest of the year at least.

“Households experience very different inflation pressures and so far this year rising prices have borne down most heavily on the poorest. For many of these families this higher inflation means an even tighter pay squeeze and an even bigger fall in the value of benefit such as tax credits.

“While there is little that government can do to bring inflation down, it can change how rising prices affect 12 million families whose incomes are being squeezed by the ongoing cash freeze to working age benefits.”

How the poorest households are forced to shell out more of their budgets on food Source: Resolution Foundation

TUC General Secretary Frances O’Grady said: “The government must stop this cost of living squeeze. “Many working people are caught in a vice as rising prices crush their pay.”

Unite assistant general secretary Gail Cartmail said: “This slight fall in inflation is a cruel illusion that will be snatched at by desperate cabinet ministers trying to paint that everything is rosy with the British economy.”

A Treasury spokesperson said: " While it is encouraging that inflation was lower this month, we appreciate that some families are concerned about the cost of living.

"That’s why we have introduced the National Living Wage, which is helping to boost earnings by £1,400 a year, and why we’ve cut taxes for millions of people to help them keep more of what they earn.

"We are also increasing our free childcare offer to help 400,000 working parents."