May 20, 2011 • 2:36 pm


“HORRIFIC! There’s no other way to describe the latest inflation figures. The cost of living is only rising faster in Estonia and Romania, say official bean counters.” The Daily Mirror, 18 May 2011.

“The leap in the Consumer Prices Index last month means the cost of living is rising faster in Britain than in all but two countries across Europe – Estonia and Romania.” The Sun, 17 May 2011.

With the Bank of England now expecting UK inflation to rise to 5 per cent in the coming year, the rising cost of living is a hot political and economic issue.

This week the upward trend in the Consumer Price Index (CPI) measure of inflation resumed, rising to 4.5 per cent after an unexpected fall in the previous month.

Both the Mirror and the Sun jumped on this latest squeeze on living standards, saying that now only Romania and Estonia had higher inflation in living costs than the UK.

In search of clarification and more details, Full Fact took a look at the figures.

Data for the inflation rates of European countries is compiled by Eurostat, who use the HICP inflation measure, which harmonises data across Europe (for the UK this figure corresponds with CPI inflation, according to the ONS).

The graph below shows HICP inflation across Europe in April 2011. While data for the UK is not yet updated in their graph, we know that the April figure was 4.5 per cent. Therefore, in April the UK did have the highest inflation in living costs of any European country, save for Romania (8.4 per cent) and Estonia (5.4 per cent).

While the Mirror and the Sun figures check out, this comparison only stands true for April, with European inflation figures currently showing a hugely varying picture depending the month. For example, the figures from back in March show that there were nine other European countries with the same or higher levels of inflation than the UK.

Looking back over the last nine months of European data shows that many countries have seen big shifts in their inflation levels, with some seeing a rising trend of inflation while others have seen a falling rate of inflation.

While the Sun made clear what measure of inflation they were looking at when making the comparison of changing living costs, the Mirror made a less specific comparison between the UK and Romania and Estonia. Therefore, we also took a look at international inflation rankings beyond the European countries, to see how the UK compares globally.

The data available for a wider comparison uses the Consumer Price Index, as directed by ILO guidelines, and therefore the data is not necessarily harmonised as is done by Eurostat. According to a table compiled on the Trading Economics website the latest international rankings of CPI put the UK at 34. Top of the ranking comes Venezuela, followed by Vietnam and then Mozambique. The major economies with the highest inflation are India and then China.


The Eurostat data, confirms what report said by the Sun and the Mirror. However, since it is based on a snapshot, and there are significant monthly variation which mean what is the case for April may not be the case in May.

With UK inflation predicted to continue its rise over the coming months, remaining far above the Bank of England target, and with the squeeze on the income of people in Britain continuing, the media will no doubt continue to focus on this story.  

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