How the cost of living crisis is affecting EU households

In a survey earlier this year, 93% of Europeans said that the cost of living crisis was their biggest concern, with other issues like inflation, the COVID-19 pandemic, poverty, social exclusion, the potential spread of the war in Ukraine, and climate change all being mentioned. 

In addition to this, nearly half of the people surveyed said that their living standards had already declined noticeably and that they were facing financial difficulties in the current climate.

So, has the situation changed since then? In a recent press release, the EU’s official statistics agency said that the crisis is still having a significant impact on quality of life. 

The annual figures show that over the last 12 months, annual inflation reached 9.2% on average in Europe. The invasion of Ukraine in particular has damaged commodity markets. In the Baltic states, inflation was the highest – in Estonia, the 12-month average inflation was 19.4%. 

On average, water and energy prices increased by 18% in the last year and transport costs increased by 12%. As of January this year, the average household spend over 47% of its income on household bills, transport, and food, which were the three sharpest increases. 

The report also shows that the cost of living crisis has worsened in the last year. It estimates that 95.3 million people are at risk of poverty or social exclusion – 21.6% of the EU population. Nearly a third of Europeans said they would struggle to pay an unexpected bill if it came up. 

Off all the EU countries, the report found that the risk of poverty was highest in Romania and Bulgaria. In Romania, 34.4% of people were at risk of poverty and 47.9% said they would be unable to pay an unexpected bill or unforeseen expense if they needed to. 

The report also provides details about Europe’s population, trade, education, health, and the state of the environment and natural resources.