Although the rich – comprising the elite and upper middle class – make more noise and have much bigger audience, it is the poor who are the real victims of inflation be it in Pakistan or any other part of the world, including the developed nations.
Unfortunately, the difference between the middle and upper middle classes has been blurred to the advantage of the affluent as those earning in millions and living in huge houses too claim to be from the middle class.
In fact, the rich make money out of every crisis one way or the other. In the words of Baron Rothschild, an 18th-century British nobleman and member of the Rothschild banking family: “The time to buy is when there’s blood in the streets.”
So the huge profits made by the tech giants, pharmaceutical and oil companies, among others, out of the pandemic and the Ukraine war shouldn’t be a surprise.
While keeping Pakistan in mind, take the United Kingdom for an example where a latest study has found that the country’s least affluent households have almost £40 a month less spare cash than they did a year ago at a time when the richest gained a similar sum in the same period.
Analysts at Retail Economics say the wealthiest 20 percent of households had £36 a month more in discretionary income in December compared with a year before, as they enjoyed record earnings growth which offset rising energy and food bills.
The Guardian in a report on this subject says the differing fortunes recorded on its cost of living tracker reflect a higher rate of inflation of 16.5 percent for those at the bottom end of the income scale, who spend two-thirds of their income on essentials such as food and energy, compared with 13.3 percent for those at the top, who spend just under half.
Richard Lim, the chief executive of Retail Economics, said: “There continues to be an uneven impact across affluence groups and the wealthiest are actually seeing their discretionary spending power rise on the back of record earnings growth, while the least affluent see their spare cash eroded by inflation.”
“This will play out differently across the market with many trading down, delaying expenditure where possible and cancelling some purchases altogether. Meanwhile, luxury spending is likely to remain more isolated from the impact, leaving mid-tier retailers particularly exposed.”
Lim said people with less cash to spare were increasingly turning to shopping in physical stores in order to keep a close eye on spending and avoid additional costs of delivery and return fees.
The figures are the latest to reveal the uneven impact in the rising cost of living as less well-off households spend a bigger proportion of their income on essentials such as food and energy bills, which have seen high inflation.
Inflation on the most basic of those needs can be higher than the average, with consumers reliant on supermarkets’ budget ranges bearing the brunt of food price inflation in the run-up to Christmas, for example.
Overall food price inflation averaged 13.3 percent in December, according to the British Retail Consortium’s latest figures.