The Cost-of-Living Crisis in the UK: An Economy on the Edge

Abstract

This chapter examines the economic, social and environmental conditions underlying the cost-of-living crisis and its impact on social and health inequalities in the UK. This examination adopts a theoretical approach based upon social ecological economics premised on the view that economic, social, and environmental conditions are interactive and interdependent. The chapter provides an analysis of key factors underpinning the cost-of-living crisis in the UK, including, the UK’s departure from the European Union, the Covid-19 pandemic, the ecological implications of climate change and th e conflict in Ukraine. The central argument of the chapter is that the impact of the cost-of-living crisis on the profile and depth of poverty and health inequalities in distinct societies is shaped by the economic, social, and environmental circumstances that people experience during infancy, childhood development, employment, environment, and ageing. These circumstances are forged within a broader set of forces and systems including distinct economic policies and systems, political systems and social, health, educational, environmental policies. These specificities are critical to understanding the impact of broader global factors on the cost of living within distinct societal contexts. A central finding of the chapter is that whilst a range of global factors have contributed to the cost-of-living crisis in the UK, a substantive body of economic analysis conducted during 2021 and 2022 clearly evidences that the cost-of-living crisis in the UK has been significantly worsened by the economic and labour market impacts of the UK’s departure from the European Union.