Introduction
In the UK and other countries, prices rose steeply during 2021 and 2022, following several years of low inflation.1 Reasons for this increase include restrictions and disrupted supply of important goods including oil, gas and foods such as wheat and cooking oil because of the conflict in Ukraine.2 This has a significant impact not least because modern economies depend on fossil fuels for food production and distribution.3 4 Also, demand for goods and services has increased rapidly following the lifting of COVID-19 restrictions, putting pressure on suppliers to meet these increases.2 In the UK, Brexit has also reduced the availability of labour to meet rising demand.5 Despite labour shortages, wage growth has remained lower than the rises in prices.1 2
Inflation has not reached these levels in the UK since the 1970s. Changes in the economy since then, and recent trends in mortality, mean that the effects are likely to be different.6 In Scotland, mortality inequalities have risen since the 1980s.7 On aggregate, mortality rates were falling until 2012, but since then improvements have stalled.8 This trend has been attributed largely to the austerity policies implemented over that time.9 Mortality then increased during the COVID-19 pandemic, which also caused pressures on healthcare and other services, resulting in a substantial backlog of unmet needs.9 10 These trends suggest the population may be less resilient to further shocks.
Rising inflation affects affordability of goods and services, particularly for low-income groups. For example, lower-income households spend a higher proportion of their expenditure on energy,11 and so are disproportionately affected by rises in energy prices.12 The UK Government has responded by introducing a range of policies to mitigate the rising cost of living: a universal Energy Price Guarantee (EPG)13 and a series of more targeted Cost of Living Support payments (box 1).14 15
Income and income changes are key determinants of health.16 Studies consistently show that low income is associated with poorer health,17 and longitudinal studies have shown that falls in income have an adverse effect on health.18–20 These impacts have differential effects on different populations. Rising inflation reduces a household’s spending power, or real income, and so is likely to have significant effects on health and health inequalities.21–23
To inform policymaking, it is important to understand the population health impacts of unmitigated and mitigated inflation – that is, inflation without and with the mitigating policies described in box 1. We used scenario modelling to estimate the likely future impacts of recent levels of inflation on mortality in Scotland, both with and without the implemented mitigation measures.
UK Government Cost of Living Support package
In February and May 2022, the UK Government announced the following payments to help mitigate the cost of living crisis14 15:
£400 grant for all domestic energy customers.
£150 Council Tax rebate for households in bands A to D (the lowest four of eight house valuation bands), or those in receipt of Council Tax Reduction benefit.
£650 Cost of Living Payment to households in receipt of means-tested benefits.
£300 Pensioner Cost of Living Payment to pensioner households in receipt of Winter Fuel Allowance/Payment (payable to everyone of pensionable age).
£150 Disability Cost of Living Payment to recipients of disability-related benefits.
Note: Household Support Fund monies were also provided to the Scottish Government to enable them to provide directed support as required. This amounted to £41 million for the period March–September 2022.15