The cost-of-living crisis sometimes feels like one catastrophe too many after several challenging years, and relocating to escape the problem is a tactic that many companies and individuals have chosen. However, before making that decision, it’s worth understanding the cost-of-living crisis in more detail. Join us today in this overview of the problem.
What Affects The Cost Of Living?
The cost of living crisis is a global affair. Its causes are complicated, but the issue mostly arose from a sequence of economic shocks, international conflicts, and the Covid-19 pandemic. These have caused widespread disruption to the production of food and energy, creating an unstable financial climate that has driven up costs throughout the world. The interconnectedness of the global supply chain has amplified the issue, transforming what could have been a localised crisis into a global emergency. Unfortunately, there is no clear strategy for solving the problem, meaning that it is likely to be an unchecked reality for years to come.
UK Geography
The UK has felt the cost of living crisis sharply. October 2022 saw inflation peak at a 41-year-high of 11.1%, with 2023 seeing a 12.8% rise in food prices. It is worth noting that dismal weather has not helped the situation in the UK, with the close of 2024 seeing farmers warning of further rises in 2025 due to waterlogged crops. Inevitably, the UK cost of living crisis does not have equal distribution, with the north being disproportionately affected. This is because lower-income households spend more on essentials such as energy and food, and are therefore more directly impacted. In contrast, London, Reading, and Cambridge have felt a reduced impact.
Least Affected
All countries have been affected by the cost-of-living crisis. However, determining who is more affected is very complex, and includes balancing considerations such as local purchasing power and groceries indexes. However, as a general trend, the least affected countries include those in South America and some parts of Africa, which have better costs of living vs the UK. This is largely due to a reduced reliance upon global supply chains, which have been severely impacted by soaring interest rates in China.
Most Affected
The most affected countries are North America, Europe, and particularly the Scandinavian Bloc. Europe and America have been directly impacted by the conflict in Ukraine, with destabilised energy prices being the primary driver. In the Scandinavian Bloc, the economic model did not have redundancy to absorb the shock of out-of-control inflation in its trading partners. Iceland, which is only just recovering from its financial collapse during the Credit Crunch, was particularly vulnerable in this regard. However, the cost of living in Norway has risen to alarming rates, prompting rapid short-term solutions. The rest of the world is watching how these frontline nations respond, with successful strategies likely to be rolled out on a global scale.
What Next?
If you’re considering relocating to help with the cost-of-living crisis, or are exploring your corporate relocation options abroad, Galleon can help. Download our free guide to international removals today.
Image Source: Canva
