Cost of living: People of colour to be hit hardest by ‘unfathomable’ poverty

·Political Correspondent, Yahoo News UK
·4 min read
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Poverty among ethnic minorities is significantly higher than the rest of the country. (Getty)

A leading race equality think tank has warned people of colour in Britain will be hit worst by the spiralling cost of living crisis, with families plunged into "unfathomable" poverty.

Experts have said "systemic" ethnic inequalities leave these communities most exposed to the dangers of soaring inflation.

Rapidly rising prices are putting pressure on household budgets across the UK – with record breaking energy bills leaving millions cutting back on key essentials like food and fuel.

Read more: Bank of England announces biggest interest rate hike in 27 years

Consultants Cornwall Insight on Tuesday said they expect the energy price cap to increase to £3,358 annually from October, rising again to £3,615 from January.

And on Thursday, the Bank of England warned it expects inflation to surpass 13% in October and predicted a recession by the final quarter of 2022.

However, the crisis is not affecting everyone equally.

People of colour are at heightened risk due to pre-existing factors, such as being on lower incomes and having more insecure work.

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Energy bills are predicted to surge this winter. (Ofgem, Cornwall Insight projections)
People in households headed by someone of Bangladeshi or Black ethnicity have the highest risk of being behind with bills. (Joseph Rowntree Foundation analysis)
People in households headed by someone of Bangladeshi or Black ethnicity have the highest risk of being behind with bills. (JRF analysis)

“While this crisis is universal, as we saw through the pandemic, some inequalities are so systemic that ethnic minority communities are likely to be impacted first, hardest and in multiple ways," Dr Halima Begum, CEO of the Runnymede Trust, told Yahoo News UK on Thursday.

Black and ethnic minorities are significantly more likely to have fallen into fuel poverty compared to their white neighbours.

According to the latest government figures, 19.1% of Black and ethnic minorities families are experiencing fuel poverty compared to 12.6% of their white neighbours.

“Until the appointment of a new prime minister in September, the country continues to lack a government that is laser-focused on this crisis," said Begum.

Read more: Food banks ‘deeply concerned’ about donations drying up in winter amid soaring cost of living

“The urgent action needed to safeguard British families through the forthcoming winter cannot be put on the back burner.”

The Joseph Rowntree Foundation (JRF) said their recent analysis found among bottom 40% of earners, 75% Black, Bangladeshi, Pakistani households are in arrears – compared to 45% of white households.

They also found, among the same demographic, 80% of black, mixed ethnicity, Bangladeshi, Pakistani and households reported going without essentials or experiencing food insecurity – versus 69% of white households.

The Joseph Rowntree Foundation's cost of living survey shows massively higher risks by ethnicity of being in arrears or going without essentials. (Joseph Rowntree Foundation research May - June 2022)
The Joseph Rowntree Foundation's cost of living survey shows massively higher risks by ethnicity of being in arrears or going without essentials. (JRF research May - June 2022)
Mixed race, African young woman shopping in supermarket, holding a yellow pepper
The Runnymede Trust say Black and ethnic minorities are over 50% more likely to have fallen into fuel poverty compared to their white neighbours. (Getty)

"The most obvious conclusion raised from looking across this analysis is anger at the injustice of such stark differences in very deep poverty, or risk of going without essentials, by ethnicity," it said on Wednesday.

On Thursday, Ofgem announced it will be reviewing the energy price every three months moving forward instead of every six months.

In response, the End Fuel Poverty Coalition warned this could lead to more excess deaths this winter.

"Ultimately, this decision will force more people into fuel poverty in the middle of winter, causing additional stress on the NHS and it may ultimately lead to increased levels of excess winter deaths this year. It is simply inhumane," said spokesperson Simon Francis.

Read more: UK living standards fall at record rate as inflation soars

"It's clear that the government and the Conservative party leadership hopefuls just don't get the scale of the problem facing the country, nor the public anger at rising bills. They are running out of time to act."

It comes as Conservative leadership hopefuls Liz Truss and Rishi Sunak are urged to announce a comprehensive package of support measures for Brits struggling with the rising costs of essentials.

The foreign secretary has pledged to suspend the green levy on energy bills and reverse hikes to national insurance - with the former chancellor pledging to suspend VAT on energy bills amid spiralling costs.

However, experts have warned these measures will benefit more wealthy households - and will also not offset record breaking price rises.

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